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An introduction to Post Office Monthly Income Scheme (PO MIS)

The Post Office Monthly Income Scheme, more commonly known as MIS, is very popular among safety-seeking investors.

Here are all the details that you should know about PO MIS.

What is Post Office Monthly Income Scheme (PO MIS)?

This is a scheme offered by the post offices in India. You deposit a lump sum amount with the post office, and earn interest on it. The interest is paid out every month.

Since the scheme is offered by post offices, it is backed by the government. Thus, the PO MIS is one of the safest avenues of investment available.

As noted in “Retirement money: How to invest, where to invest”, the PO MIS scheme is a very good investment option for investing retirement funds.

 

Interest Offered

The rate of interest offered on PO MIS is 8% per year. This interest is paid out every month. This interest can also be deposited directly in your savings account, so that you don’t have to go to the post office every month.

 

Maturity Bonus

You get a 5% bonus on maturity. Thus, the effective yield works out to 8.9% per year.

 

Income Tax (IT) Benefits

There is no income tax benefit on investments in the scheme. The investment in PO MIS is not considered for deduction under section 80C.

(Please read “Saving Income Tax – Understanding Section 80C Deductions” to learn about the income tax benefits u/s 80C)

The interest earned is also fully taxable.

There is no tax deducted as source (TDS). The investment in PO MIS is also exempt from wealth tax.

 

Duration

The tenure of PO MIS is 6 years – your investment would remain locked for this duration.

 

Premature withdrawal / encashment / closure and Penalty

Premature withdrawal of the invested amount is allowed after 1 year of opening the account.

If the account is closed between 1 and 3 years of opening, 2% of the deposited amount is deducted as penalty. If it is closed after 3 years of opening, 1% of the deposited amount is charged as penalty.

The bonus amount is forfeited when you close the account early.

 

Who can invest?

Only individuals can invest in PO MIS – you can either open a single account or a joint account (2 / 3 names).

A Non Resident Indian (NRI) or Hindu Undivided Family (HUF) can not open a PO MIS account.

 

Investment Limit

There is an upper limit on investment in PO MIS scheme: you can not invest more than Rs. 4.5 Lakhs in it in a single account. If you invest jointly (2 / 3 names), the limit is Rs. 9 Lakhs.

The minimum investment needed is Rs. 1,500.

The amount can be paid in cash, through a demand draft (DD) or locally payable cheque.

 

Number of Accounts

Any number of accounts can be opened, but the total investment can not exceed the upper limit across all the accounts.

 

Nomination

Nomination facility is available – you can specify the nominee at the time of opening the account, or anytime later.

 

When can you invest?

The PO MIS account can be opened any time throughout the year.

 

Account Operation

On opening the Post Office Monthly Income Scheme (PO MIS) account, you would be issued a passbook. This passbook would be used to record all the interest payments.

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  1. Hi Viresh,

    You can download forms for various post office schemes here: Post Office Schemes: Downloadable Forms

    However, I believe the form for premature withdrawal from MIS is not available online. Therefore, youn would need to check with the post office.

  2. Kindly provide a format for premature withdrawal form for MIS of postal schem

  3. Anonymous says:

    Hi Shilpa,

    The bonus you get at the end of MIS is 5%.

    Thus, you need to invest Rs. 1,00,000 in order to get a bonus of Rs. 5,000.

  4. how much amount have to save in MIS so that bonus will get for 5000/-

  5. Anonymous says:

    Dear Raag, the concept of single account and joint account is little confusing. Please explain that between a husband and wife, can they have a single account on their individual names with respective investment of Rs 4.5 lakh, and then one joint account with an additional investment of Rs 9 lakh, thus making a total investment of Rs 18 lakh??? Thereafter, can either of them afford to have another joint account with a third member of the family???

  6. Anonymous says:

    Hi Anita,

    Yes, you can have multiple MIS accounts at different post offices. But the total amount deposited shouldn’t be over the limit specified in this article.

  7. can we open mis accounts in different post offices

  8. Anonymous says:

    Hi Ranvir,

    No, this is not possible. Your total investment can not exceed Rs. 4.5 Lakhs in PO MIS.

  9. lavanya says:

    we have Mis accounts in post office when we had our own business in india,after1 years my husband went abroad and later I. Now my MIS deposits are maturied.I have send my pass book to my father and authorisation letter.But they say that we can not get interest as we are Nri’s. we were not nri’s at the time we opened mis accounts. Can you tell me what i can do?

  10. Anonymous says:

    Hi Tuhin,

    In an MIS in joint names, the entire interest is credit to the first holder.

    Thus, in your example, the entire interest would be added to the income of Mr. A, and the tax liability would be calculated. There is no tax liability for Mr. B.

  11. Anonymous says:

    Hi Lavanya,

    NRIs are allowed to continue the account that they opened when they were resident Indians. They are not allowed to renew them, but they can cantinue them.

    In view of this, I believe you should be getting the interest.

    This is true even for PPF account.

  12. Hi,

    In case on Joint Purchase of MIS by Mr. A and Mr. B if only Mr. B is in the taxable bracket what would be the tax implication on Mr. B on the interest earned if Mr. A is the First Holder.

    Thanks,
    Tuhin

  13. Keerthana says:

    Hi,

    I have 2 lacs invested in MIS account, by July 2009 it will complete one year of investing. I would like to withdraw full 2 lacs in July, i.e. after one year.

    How much money will I get? What about Bonus? I am getting my interested credited every month in SB ac in post office. Kindly suggest.

  14. Anonymous says:

    Hi Keerthana,

    Since you would be closing the account between 1 and 3 years of opening, 2% of the deposited amount would be deducted as penalty.

    Also, you would not get any bonus.

  15. My father opened a MIS account and deposited 6 lacks 2 years ago He lost all the details and the check book of that accout some were even signed. Is ther any way to find my account number and the check book number from the post office. Is there any whay my check book that can be miss used. I am in USA now. Dont know whom to contact regarding it. I am very much worried and need your openion/help.

  16. Subhajit Pal says:

    Hi
    I am at the highet tax slab bracket and in working in private sector. My wife is housewife. Can I open a PO MIS accout on my wife’s name and put 2.5 lacs of reuppe ? Is there will be tax liability on me / my wife ?
    Subhajit

  17. Anonymous says:

    Hi Subhajit,

    Yes, you can. The interest, however, would be clubbed with your income as it is an income generated from the amount gifted by you.

    This would be added to your “other income” and you would have to pay income tax on it as per your tax slabs.

  18. Anonymous says:

    Hi Kumar,

    There is no cheque book for an MIS account. I believe you are talking about the passbook.

    You should be able to get the account details / number from the post office where the account was held.

    A duplicate pass book can be issued at a sub post office by filling an application form and paying a fee through postage stamps.

    You father should do this as soon as he can.

  19. Anonymous says:

    Hi Mr. Rath,

    I do not provide specific investment advise on the website.

    If you are interested, you can avail my services as a financial planner through “My Financial Plan”

  20. I want to invest around Rs 5 lakhs.Please advise where I will get maximum return .MIS (payable monthly with bonus) OR PPF (payable quarterly at 9%)

  21. Hi,

    One of my friend’s father expired 4 months back. His father was out of station so he gave signed withdrawal to their agent, and the agent continued withdrawing the money and depositing it in another account as per his direction. Now the agent is not sure what to do and neither my friend is as they have withdrawn the interest from MIS for last 4 months. They are yet to receive the death certificate. What should they do? will they have to return the interest back with some penalty? is it a criminal offence?

    Thanks & Reagrds,
    Ashish

  22. Hi,
    I have invested Rs1,00,000/- in postal MIS and reinvesting the interest so earned in the RD account (Rs.660/-). In the month of June 2009, the MIS has matured. What will be the final amount that I would receive from my MIS AND RD. Thank you

  23. Hi Ashish,

    I do not think this would be a criminal offense – it is a genuine mistake.

    Once your friend has the death certificate, he should approach the postmaster of the concerned post office. He would direct him about the course of action.

  24. Hi Sunita,

    For MIS, you would get the invested amount + bonus on maturity.

    For the RD, you get Rs. 728.49 for every Rs. 10 of the RD.

    You can approach the post office for the exact amounts in your case.

  25. Hi Rohit,

    Thanks – I am happy that you liked the articles.

    You are right that there is no easy way of finding out if someone has joint accounts in 2 post offices or not. But with computerization, this should become quite easy.

    Even I am not sure how the Post Offices ensure this, but well, if it is not allowed, it is not allowed!

  26. Hi Dhaval,

    1. Yes, she can.

    2. No, NRIs can not hold an account or be joint members

    3. No, a child can not be a joint holder of an MIS account.

  27. Hello raagvamd,

    Thanks for the wonderful article.

    I am however confused and sorry for again asking the same question.

    Can I have 2 separate Joint account is 2 diff. Post Offices, so that I can have an investment of 9 +9 = 18 Lakhs ?

    Also, if the above is not possible then how would a someone know that we have 2 joint account is diff POs. I am not trying to bend the rules, just wanted to know the process.

    Thanks, your answer were will greatly appreciated.
    Regards
    Rohit

  28. Sir,
    Can my wife open MIS account from the gifted money of my NRI income. Also she can open account jointly with me upto ful limit means 9lakh. Also she can open joint account with my minor child upto max limit 7.5 lakh (4.5 +3lakh) Please suggest me.
    Thanks

  29. Sumit Kumar says:

    Sir,
    My father was having 3 Joint MIS with my mother of 2.1 Lakh(2003), 1.05 Lakh(2003) and 50 Thousand(2002) respectively. He expired in Yr 2004. My mother has got payment for 50K and 1.05L MIS. Now, naturally after death of my father, per head limit of 3 Lakh (at that point) exceeded. So, in this case, Will there be any deduction from interest and maturity amount??

  30. Sir,
    I am a NRI. So i cannot open MIS account.My wife already have MIS account upto full limit.I want to open my minor child MIS account. Can she open our minor child MIS account from my NRI gifted money to her savings. she will be as as a guardian. Can this be a possible or any other way to open my minor child MIS account
    Plese clear me.

  31. Hi Sumit Kumar,

    Considering the circumstances, no, there should not be any deduction.

  32. Hi Dhaval,

    Once you gift money to your wife, she would be legally allowed to do anything with it, including investing it.

    However, as I had replied earlier, I do not believe a minor can open an MIS account.

  33. I know I am going to ask a repeat question, but this is one of the most complex area to understand I believe.
    Say, I invest in MIS for 4.5 lacs and kept my Mother as Nominee (It’s a single MIS with just a nominee)
    My wife invests in another MIS for 4.5 lacs and kept her Mother as Nominee (This is also a single account)
    Now my wife and I opened a joint MIS (first holder me and 2nd holder my wife and no nominee) of 4.5 lacs.

    So would this be permissible as I am neither crossing single account limit of 4.5 lacs nor joint account limit of 9 lacs?

    In same case as above, if instead of opening single a/c me and my wife both would have opened 2 joint accounts with our respective mothers, would that be legal? In such case I have total 9 lacs as joint where 4.5 lacs with my wife and 4.5 lacs with my mother?

    Appreciate your response.

  34. Anonymous says:

    Hi Kaushik,

    Although what you have said is possible, especially because the Indian post offices are not connected througha network, it doesn’t go with the spirit of the law.

    The law expects that one perosn should not have more than Rs. 4.5 Lakhs in PO MIS. All the scenarios you have mentioned break this spirit of the law.

  35. Sanjeev Jindal says:

    I am karta of an HUF. We have no PO MIS at present in our individual name. We want to invest Rs 9 Lacs from HUF Funds in joint name (Me and my wife) and to compute the income in HUF A/c. Is it legally correct.

  36. Anonymous says:

    Hi Raag,
    I have a MIS account in Ahmedabad and i am residing in bangalore.The MIS is going to mature on 14th January 2010.My father is going to take the money withdrawal on my behalf.Had two doubts:
    1.”Is any form required to be sent to my father to withdraw money on my behalf?”If yes,please give me the link of that form where can i find it and at what places do i have to sign on that…
    2.Also i need to open a new MIS account.. so the form which is available on this site with the name “SB3-ApplnforOpeninganAccount”…can this be sent to my father with my signatures on it..and where all do i need to sign on this form…

    I request you for an early reply…because it is urgent…

  37. Hi Raag,
    MY MIS got metured 3 days back and my agent without my knowledge opened a fresh MIS account on the same day. I want to cancel the New MIS. what i need to do ?

  38. I am a Non-resident Indian. My family members are in India. Can I open an MIS account jointly with my wife, who is a Resident Indian?

  39. There are two types of joint accounts in the form – Joint-A (Jointly) and Joint-B (Severally). What’s the difference between the two?

  40. SUNIL SINGH says:

    I am a small business man, i save Rs. 2.25Lakh in a three years, and now want to open MIS in post office, can any member of post ofice enquiry about my money.

    Please solve me

  41. Bijal Shah says:

    What is the maturity amount of MIS + RD in post office savings if I deposit 200000.00 and what is the maturity amount after 6 years……

  42. Does this limits are applicable on the basis of First holder or these limits are applicable for any order of the holder. Example Mr. X jointly with Mr. Y has invseted Rs.1.5 Lac again Mr.X jointly with Mr. A has invested Rs. 3 Lac here Mr. X is second holder in this scenario How the limits will be counted and further how much additional amount can Mr. X, Mr. Y and Mr. A invest.

  43. Hi
    I understand that the Interset from MIS scheme is wholly axable. What about the bonus amount received on maturity . Is that also taxable?

  44. Shrinath says:

    Hi Raag,

    its really nice of having this website giving so many information.
    please answer my query also..
    i have a joint account with post office MIS scheme with my mother.
    and we have opened same in ahmedabad .
    now we are in pune, so till this time my mother used to go to ahmedabad twice a year and withdraw the interest amount credited in our mis account. so now i am planing to go to ahmedabad next week, so i want to ask can i withdraw the interest amount credited in our mis account?

    pls advice.

    Rgds
    shrinath

  45. Yash Patel says:

    hi…!
    I can not understand that with adding 5% bonus of maturity, it is equal to 8.9% per year. please explain it with example…

    Thanks

  46. Dear Raag,
    Though you have answered many questions related to PO MIS, I have a query related to this. Supposing wife and husband jointly have PO MIS totaling to 6 lakhs and two minor accounts with mother as guardian totaling to 3 lakhs, will it be counted that the total sum 9 lakh is already in my wives name or whether minor accounts investment will not be counted for joint accounts. What is the age limit for minor account and after what age separate accounts can be opened. Also please answer how is the joint and minor/guardian accounts counted.
    Regards,
    Sriram

  47. An introduction to Post Office Monthly Income Scheme (PO MIS) Article is producing an in sufficient information on post office MIS scheme. The matters discussed here in can be recoverable from a post office agent.
    The new thing is that what are the documents required w.e.f. 15 th may 2010 that recomended by the honnable finnace minister is that you have to produce PAN card,photos etc.So, go to the post office.

  48. Hello
    I was NRI for FY 2009-10 and returned to India on 1st March, 2010 and transferred all my money from NRE to normal Saving A/c. From SB A/c i invested 9 lacs in PO MIS in April-2010. Now the situation is i might be again going abroad so i will become NRI again for FY 2010-11 and next few years. My question is (i) what happens to my MIS account, can i continue this as my status for both the years and coming years will be NRI? (ii) do i have to inform post office about my nri status? (iii) if i can continue the accounts, what treatment is given to interest?
    Appreciate your valuable advice.
    Regards,

  49. Charanya G says:

    Hello Sir,
    I just have a case here where I need your help and your suggestions. The case as follows, Mr. Mohan invested in PO MIS with Rs. 3,00,000/- jointly in the name of himself and his wife Kavitha and another Rs. 3,00,000/- jointly in the name of himself and his daughter Revathy both being “either or survivor” account. Mohan’s wife died in 2009. Mohan converted his joint account into a single account. After two months he receives a letter from the PO saying that he had exceeded the limit prescribed for PO MIS account from the date of the death of his wife and the PO is claiming for the excess interest paid to him.
    Please suggest Mr. Mohan in this case.

  50. What is maturity amount of Recurring Deposit in Indian Post-Office after 5 Years if I deposit Rs.500 every month in five years.

  51. sir,
    i have just read that interest on deposite under the post office monthly income account rules 1987 is not taxable. please refer.
    section 80L (iiia)

    vinod dave

  52. prakash rao says:

    would like to know if i can renew my postal saving scheme after its expiry date of 6years

  53. sir
    how can i withdrawal mis which is on my father name . as my father suffered from brain hammerage and unable to do so. he is totally paralised.

  54. Dear Sir,
    Is there a monthly income scheme available with Banks. Recently the Bank interest rates have been hiked (up to 8.25 percent). I want a post office alternative and I am planning for a Monthly Income scheme in BANK OF INDIA. Is there something like a MIS in Bank of India? Please advise!

    Thanks in Advance.
    Anurag

  55. mujeeb.t.a says:

    Unfortunately post office paid my mis amount 3laks to the agent(mahilapradan) without our knowledge or signature.we were abroad while the agent with drawn the money.We gave complaint to the postal suprend.After verification postal department found that their staff done mistke by giving money to the agent without our presence & knowledge.They even found that the signature used for the withdrawel is not matching with the specimen signature.Does the postal suprend can take a decesion to compansate our loss by paying the money ?or we have to approch any court to compansate our loss?please advice

  56. Komal jain says:

    Sir i don’t have paid 500rs. Per month ac Before 4months so what is the painalty charge apply in my post office account and what is the effect in my ac

  57. I think the admin of this website is actually working hard for his web site, because here every information is quality based data.

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