The Department of Posts, under the Ministry of Communications, offers many savings schemes. One such scheme is the Post Office Monthly Savings Scheme (POMIS). Effective from 1 April 2020, the interest rate is 6.6% per annum. Since the government backs the scheme, there is capital protection.
Only resident Indians are eligible for opening a POMIS account. However, guardians of minors (above 10 years) or persons of unsound mind can also open an account on their behalf. Joint accounts with up to three adults are also allowed. For a single account, the maximum investment limit is Rs.4.5 lakh and Rs.9 lakh for joint accounts.
To be eligible to open a POMIS account, you need to have a savings account with the post office. An application is to be submitted along with the photocopy of your identity card, residential proof and two passport size photographs. The application is available on the official website as a document.
This scheme is ideal for risk-averse investors looking for a steady pension post-retirement. There is minimal risk involved since the government backs it. The contributions made are not invested in markets. Unlike other monthly income plans like mutual funds and insurance plans, the scheme has a fixed return rate. Premature withdrawal is also permitted, with applicable penalties. There is an option to move funds to a recurring deposit account (RD) and reinvest the corpus. POMIS accounts are transferable from one post office to another.
For any clarifications/feedback on the topic, please contact the writer at jyotsna.singh@cleartax.in
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