India Post’s Monthly Income Scheme offers a 7.4% annual rate, with deposits of up to ₹9 lakh in a single account and ₹15 lakh jointly, but early withdrawals attract penalties and the interest is taxable.
For savers looking for predictable income rather than market-linked returns, the Post Office Monthly Income Scheme remains one of India Post’s most straightforward small savings options. The scheme pays interest monthly on a lump-sum deposit and, according to India Post, the rate is currently 7.4% a year, payable each month. The deposit stays locked for five years and the government-backed structure makes it attractive to retirees and others who want a regular cash flow without equity risk.
India Post says the account can be opened by a single adult, by up to three adults in a joint account, or through a guardian for a minor or a person of unsound mind. A minor aged 10 or above can also open the account in their own name. The minimum deposit is ₹1,000, and additional deposits must be made in multiples of ₹1,000. The maximum investment limit is ₹9 lakh for a single account and ₹15 lakh for a joint account, with the overall ceiling applying across an individual’s MIS holdings.
The monthly payout depends on the amount invested. On the maximum single-account deposit of ₹9 lakh, annual interest works out to ₹66,600, or ₹5,550 a month. Over five years, that adds up to ₹3,33,000 in interest, before the principal is returned at maturity. On the joint-account limit of ₹15 lakh, the annual interest comes to ₹1,11,000, which translates into ₹9,250 a month and ₹5,55,000 over five years.
The scheme’s simplicity comes with some limits. India Post says no fresh deposits can be added after the account is opened, and the money cannot be withdrawn in the first year. If an investor closes the account after one year but before three years, the penalty is 2% of the deposit; after three years, the penalty falls to 1%. That makes the scheme better suited to money that will not be needed for the full term. Interest is taxable under the investor’s income-tax slab, which can reduce the effective return for higher-rate taxpayers.
The broader policy backdrop has been stable. India Post’s savings page and departmental interest tables show that the MIS rate has remained at 7.4% since January 2024 and that the latest official tables continue to list the same rate, along with the standard deposit caps and monthly payment structure. For households that value certainty over upside, the scheme offers a fixed income stream with little operational complexity, though investors should still check the prevailing terms at their post office before opening an account.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
