Post Office MIS Calculator

What the Post Office Monthly Income Scheme actually is

The Post Office Monthly Income Scheme — POMIS, or just MIS — is a five-year government-backed deposit that pays you interest every month and returns your capital untouched at the end. You are not growing a corpus; you are converting one into a predictable monthly cheque. That distinction decides whether the scheme suits you.

It is run by India Post and backed by the Government of India, so the capital carries a sovereign guarantee rather than the ₹5 lakh deposit insurance that applies to bank fixed deposits. The interest rate is set by the government each quarter.

How the payout is calculated

The arithmetic is simple, and simpler than most people expect — POMIS does not compound. Interest is calculated on your deposit and paid out monthly:

monthly income = deposit × annual rate ÷ 12

At the current 7.4%, a ₹9,00,000 single-account deposit pays ₹5,550 a month, every month, for sixty months. That comes to ₹3,33,000 of interest across the full term, and your ₹9,00,000 is returned at maturity.

What a deposit pays at 7.4%

Deposit limits, and the joint-account trick

A single account is capped at ₹9,00,000 and a joint account at ₹15,00,000. Both ceilings were raised from ₹4.5 lakh and ₹9 lakh in April 2023, which is why older articles still quote the smaller numbers.

The limits apply per person across all MIS accounts, and in a joint account each holder's share counts towards their own limit — so a couple with ₹15,00,000 jointly has used ₹7,50,000 of each person's ₹9,00,000 allowance. A couple can therefore hold ₹15,00,000 jointly and still open individual accounts, up to a household total of ₹18,00,000.

The tax point most guides skip

MIS interest is fully taxable at your income-tax slab, and it qualifies for no deduction — there is no Section 80C benefit on the deposit and no exemption on the interest. What makes it easy to miss is that India Post deducts no TDS on MIS interest. Nothing is withheld, so the money arrives whole and the tax is still owed at filing.

That changes the real yield substantially. On the ₹9,00,000 example paying ₹5,550 a month:

At the 30% slab a headline 7.4% is really 5.18%, which is why MIS suits retirees and others with little or no other taxable income far better than it suits a high earner looking for extra income.

Getting out early

The term is five years and the exit rules have teeth. You cannot close the account at all in the first year. Between one and three years, closing costs a 2% penalty on the deposit; between three and five years it costs 1%. The penalty applies to your capital, not to the interest already received, and any interest already paid to you is yours to keep.

Where MIS fits, and where it does not

MIS is the right instrument when you need certainty of monthly cash from capital you already hold — a retiree replacing a salary, or someone parking a windfall while deciding what to do with it. It is the wrong instrument for growing money, because the payout does not compound and the fixed rupee income loses purchasing power every year. Over the five-year term at 6% inflation, that ₹5,550 buys what about ₹4,148 buys today by the final month.

If you want the monthly income and some growth, the usual answer is to reinvest the payout rather than spend it — into a recurring deposit for certainty, or a SIP if the horizon is long enough to tolerate volatility. If you want a withdrawal plan from a market-linked corpus instead, compare it with an SWP, where the payout can rise over time but the capital can fall.