Post Office Monthly Income Scheme (MIS) Account: Get Paid to Save

Post office saving scheme offers different options where individuals get monthly profit for their savings. The most beneficial of all the saving schemes is the Post Office Monthly Income Scheme (MIS) account wherein the individual can start the investment with just Rs 1,500/- and its multiples up to Rs 4,50,000/- in a single account with an annual interest rate of 7.80% payable monthly. 

Post Office Monthly Income Scheme (POMIS) Interest Rates: 

Amount of Deposit	Rate of Interest w.e.f. April 1, 2016
- Multiples of Rs 1,500/- - Up to Rs 4.5 lacs in single account - Up to Rs 4.5 lacs in MIS (including share in joint accounts) - Up to Rs 9 lakh in joint account divided equally among the two account holders	7.80% per annum payable monthly

Features of POMIS account: 

•    Individuals can open the account
•    Account can be opened by cash or cheque 
•    Nomination facility available
•    Account transfer facility from one branch to another is available
•    Multiple accounts opening facility 
•    Minors are also eligible to open an account
•    2 or 3 adults can open joint accounts
•    Joint account holders have equal share
•    Joint account can be converted into Single account and Vice Versa
•    Maturity period is 5 years w.e.f. December 1, 2011

To understand it in a simple way, let us take an example that Anuj is investing Rs 2,50,000/- in Post Office Monthly Income Scheme (MIS) account (single). The interest rate he will get is 7.80% which is payable monthly. The net profit per month on Rs 2,50,000/- is Rs 1,625/- that can be withdrawn every month easily. 

Amount of Deposit	Rate of Interest	Monthly Income
Rs 2,50,000/- p.a	7.80% p.a	Rs 1,625/-

The monthly profit can be satisfactory to some people. But, a smart investor would always look for some investment medium to invest the amount generated every month. For this, investing the profit amount in Recurring Deposit (RD) is the best option.  

How to open a Post office Recurring Deposit (RD) Account?

The procedure to open an RD account is very easy. If you have a saving bank account, you can request for automatic transfer of Monthly Income Scheme (MIS) interest to Recurring Deposit through the same account. 

Here are the features of Post Office Recurring Deposit Account:

•    Account can be opened by cash/cheque 
•    Nomination facility is available 
•    Minors can also open the account
•    Joint account can be opened by two adults
•    Single account can be converted into Joint and Vice Versa
•    One withdrawal up to 50% of the balance allowed after one year

Type of Account	Amount of Deposit	Rate of Interest w.e.f. April 1, 2016
Individual account	Rs 10/- per month or any amount in multiples of Rs 5/-	7.40% per annum compounded quarterly

In the above example of Anuj's investment in POMIS, he gets Rs 1,625/- per month as the profit amount. If Anuj invests this amount in post office Recurring Deposit account for a fixed time of 6 years on an interest rate of 7.40% per annum (compounded quarterly), Anuj gets an additional profit of Rs 1,47,415/- at the end of the maturity period. 

Amount of Deposit	Period of Deposit	Rate of Interest	Maturity Amount
Rs 1,625/-	6 years	7.40% p.a	Rs 1,47,415/-

Isn't it amazing that you get more than 50% profit on the principal amount? Well, smart investments