Finance

Post Office Monthly Income Scheme

Post Office Monthly Income Scheme
The post-office monthly income scheme (MIS) provides for monthly payment of interest income to investors. It is meant for investors who want to invest a sum amount initially and earn interest on a monthly basis for their livelihood. The MIS is not suitable for an increase in your investment. It is meant to provide a source of regular income on a long term basis. The scheme is, therefore, more beneficial for retired persons.

Features
Only one deposit is available in an account. Only individuals can open the account; either single or joint.( two or three). Interest rounded off to nearest rupee i.e, 50 paise and above will be rounded off to next rupee. The minimum investment in a Post-Office MIS is Rs 1,500 for both single and joint accounts. The maximum investment for a single account is Rs 4.5 lakh and Rs 9 lakh for a joint account. The duration of MIS is five years.

Returns
The post-office MIS gives a return of 8.40 % interest on maturity. The minimum investment in a Post-Office MIS is Rs 1,500 for both single and joint accounts

Deposit Rs	Monthly Interest
4,500 9,000 45,000 90,000 1,20,000 4,50,000 9,00,000	32 63 315 630 840 3150 6300

Advantages
Premature closure of the account is permitted any time after the expiry of a period of one year of opening the account. Deduction of an amount equal to 2 per cent of the deposit is made when the account is prematurely closed i.e between 1 year and 3 years. Investors can withdraw money after three years, with a discount of 1%. Post maturity Interest at the rate applicable from time to time. Monthly interest can be automatically credited to savings account provided both the accounts standing at the same post office.

Deposit in Monthly Income Scheme, and invest interest in Recurring Deposit to get 8 % (approx) interest. The interest income accruing from a post-office MIS is exempt from tax under Section 80L of the Income Tax Act, 1961. Moreover, no TDS is deductible on the interest income. The balance is exempt from Wealth Tax.

How to Open
You can buy a post office MIS at any post-office in India. When you open an MIS, you will get a certificate issued by the post office. In addition, the investor is provided with a passbook to record his transactions against his MIS.