Post Office MIS Calculator 2026

7.4% monthly income — who POMIS is for

Post Office MIS is India's simplest guaranteed-income instrument. You deposit a lump sum, a fixed interest is paid to your account every month for five years, and your principal comes back at the end. No market risk, no lock-in surprise, no credit risk. At 7.4% p.a., it outperforms most savings accounts and money market options by a wide margin.

• The income-seeker who isn't 60 yet — SCSS (8.2%, restricted to senior citizens 60+) is the better scheme if you qualify. But if you're 35 or 45 and want predictable monthly cash flow from a lump sum — to cover household expenses, EMIs, or a part-time SIP — POMIS is the most straightforward government option available to you. No FD gives you a sovereign guarantee AND monthly credit without TDS complications.
• The retiree who wants monthly (not quarterly) cash flow — SCSS pays quarterly; POMIS pays monthly. For retirees managing monthly expenses and SIP installments, monthly timing matters. Some retirees split: SCSS for the main income, POMIS for the monthly-credit preference or to exceed SCSS's ₹30L cap via a joint account with a spouse.
• The low-tax-bracket investor who wants no TDS complexity — POMIS never deducts TDS. For investors in the 0% or 5% bracket (retired, housewives, students with inherited lump sums), there is no form to submit, no deduction to reclaim. The full monthly amount arrives; you declare it in ITR if you file.
• When POMIS is NOT the answer: If you're a senior citizen, SCSS is strictly better (8.2% vs 7.4%, 80C deduction on deposit, ₹30L limit vs ₹9L). If you're in the 30% tax bracket and want to grow wealth, PPF (7.1% but fully EEE) or ELSS gives a better post-tax outcome. POMIS is an income tool, not a compounding tool — the interest is paid out, not reinvested.

How the monthly interest is calculated

POMIS uses simple interest, not compound interest. The interest is calculated on the original principal every month and paid out. The principal does not grow — it returns in full at the end of 5 years.

Interest starts accruing from the date of account opening. The first payment arrives one month after opening — if you open on 20 May, you receive your first credit on 20 June. Subsequent credits follow on the same date each month.

Premature closure — exact rules

POMIS allows early exit after the first year, but penalises only the principal return. The monthly interest you have already received is yours to keep in all cases.

Example: You deposit ₹9,00,000 and close after exactly 2 years. Penalty = 2% of ₹9,00,000 = ₹18,000. You receive ₹8,82,000 as the principal return — plus all 24 months of interest (24 × ₹5,550 = ₹1,33,200) that was already credited monthly. Total in hand: ₹10,15,200. Had you stayed to maturity, total would have been ₹12,33,000 — you gave up ₹2,17,800 in forgone interest plus the ₹18,000 penalty.

The calculator's "What if you close early?" section shows the exact numbers for your deposit and chosen closure year.

Tax treatment — the complete picture

There is no threshold, no form to submit (no Form 15H or 15G applies here), and no withholding. The full monthly interest credits directly to your account. The tax obligation rests entirely with the investor.

Key implications:

• 0% bracket investors get the full 7.4%. Retirees with no other income, housewives, and anyone below the ₹3 lakh basic exemption threshold pay zero tax on POMIS income. The no-TDS feature means the full ₹5,550/month arrives without any withholding — there is nothing to claim back.
• 30% bracket investors get 5.18% effective. At this level, POMIS is not compelling from a tax-efficiency standpoint. PPF (7.1% fully EEE) gives a higher effective post-tax return — but PPF locks your money for 15 years and does not pay monthly income. The trade-off is liquidity and income frequency vs tax efficiency.
• No 80C benefit on the deposit. Unlike SCSS, PPF, NSC, ELSS, and 5-year FDs, POMIS deposits do not qualify for Section 80C deduction. The absence of any tax advantage on the principal is the biggest structural disadvantage of POMIS for tax-paying investors.

Joint account rules — maximising household income

• Up to 3 holders — any combination of Indian resident adults; they do not need to be relatives. All holders have equal rights over the account.
• Maximum ₹15 lakh — the joint account ceiling. Each individual holder's total POMIS investment (their shares across all single and joint accounts) must not exceed ₹9 lakh.
• Equal interest sharing — interest is always distributed equally among joint holders. You cannot specify a 60/40 or any other unequal split; the scheme mandates equal shares. This has tax implications: each holder must declare their proportional share of interest as income.
• Couple strategy — the honest math: The most tax-efficient household setup is two separate individual accounts (₹9 lakh each = ₹18 lakh combined). A ₹15L joint account with 2 holders means each holder's ₹7.5L share counts toward their individual ₹9L cap — leaving only ₹1.5L room for their own individual account. Two singles beats one joint for most households.
• Conversion allowed — a single account can be converted to a joint account (and vice versa) by visiting the post office and submitting a request with the new co-holder's details.

POMIS vs SCSS — the honest comparison

If you are a senior citizen (60+), SCSS is almost always better. If you are under 60, POMIS is your primary government-backed monthly income option. Here is the full comparison:

POMIS vs bank FD with monthly payout — when MIS wins

Bank FDs with monthly interest payout are the closest substitute to POMIS. Here is the honest comparison for a 5-year instrument:

• Rate: POMIS at 7.4% vs FD at 6.8–7.5% (top public sector banks, 5 years). SBI 5-year FD yields 6.5% (7.5% for senior citizens). Top private banks (HDFC, ICICI) offer 7.0–7.25% on 5-year FDs. POMIS at 7.4% is competitive with the best 5-year FD rates for non-senior investors, while being backed by a sovereign guarantee.
• Safety: POMIS wins for large deposits. POMIS carries the full Government of India guarantee — there is no default risk. Bank FDs are covered by DICGC only up to ₹5 lakh per depositor per bank. For a ₹9 lakh deposit, any bank failure means the excess ₹4 lakh is at risk. POMIS has no such ceiling.
• TDS: POMIS wins for non-TDS complexity. FDs deduct TDS on interest above ₹40,000 per year (₹50,000 for senior citizens). You need to submit Form 15G or 15H to avoid TDS, and track it across banks. POMIS deducts no TDS at all — simpler, but the tax liability still exists.
• Flexibility: FD wins on flexibility. FDs can be opened at varying tenures (7 days to 10 years), at multiple banks, and laddered easily. POMIS is fixed at 5 years. FDs also allow premature closure with no minimum lock-in (penalty applies, but you are not locked for a year as in POMIS).
• 80C: Some FDs win. Tax-saver FDs (5-year lock-in) qualify for Section 80C deduction. POMIS does not. If you need both income and tax saving, a tax-saver FD gives you the 80C benefit; POMIS does not.

The reinvestment play — MIS income + SIP

POMIS pays out monthly income whether you need it or not. If you are in an accumulation phase (not yet spending the income), that monthly cash flow can be automatically deployed into an equity SIP — creating a barbell structure: guaranteed income base + growth engine.

The net effect: your ₹9 lakh POMIS returns ₹9 lakh (principal) + ₹3.33 lakh (total interest paid out over 5 years) + ₹4.06 lakh (SIP corpus from reinvested interest) = ₹16.39 lakh total. Versus keeping ₹9 lakh in a savings account for 5 years at 3.5%, you end up with ₹10.66 lakh. The reinvestment strategy nearly doubles the wealth created from the same POMIS investment.

This works best for investors in the 0%–5% tax bracket. At 30%, the after-tax MIS income is ₹3,885/month — a smaller SIP base, but still meaningful.

How to open a POMIS account

Prerequisite: You need a Post Office Savings Account before you can open POMIS. If you don't have one, open it first at your nearest post office.

Interest rate history (2016–2026)

POMIS rates are reviewed quarterly by the Ministry of Finance. The rate has been stable at 7.4% since Q2 FY 2023-24 (October 2023).

Frequently asked questions