Principal Invested
₹ 5,00,000
Guaranteed Monthly Payout
₹ 3,083
Total Interest Earned
₹ 1,85,000
Total Maturity Return
₹ 6,85,000
About the Post Office Monthly Income Scheme (MIS) Calculator
Our free Post Office Monthly Income Scheme (MIS) Calculator helps investors determine their guaranteed monthly interest payouts and overall returns from the Post Office Monthly Income Scheme (POMIS), a secure government-backed savings option.
1. Post Office MIS Mathematical Formulas
Post Office Monthly Income Scheme guaranteed monthly payouts and cumulative returns are computed using simple interest disbursed every month:
Guaranteed Monthly Payout = (Principal Investment Amount × Annual Interest Rate Percentage) / (12 × 100)
Total Interest Earned = Guaranteed Monthly Payout × Total Months (Tenure in Years × 12)
Total Maturity Return = Principal Investment Amount + Total Interest Earned
Where the defined variables are:
- Principal Investment Amount (P): Single lump-sum deposit in POMIS (subject to limits of ₹9 Lakhs for single and ₹15 Lakhs for joint accounts).
- Annual Interest Rate (r): Guaranteed percentage rate notified quarterly by the Ministry of Finance.
- Tenure (t): Scheme investment duration in years (standard 5-year lock-in period).
2. Practical Worked Example
Let us review a standard Post Office Monthly Income Scheme calculation scenario:
- Investment Amount: ₹5,00,000 (₹5 Lakhs)
- Annual Interest Rate: 7.4% per annum
- Tenure: 5 years (60 months)
Calculation Breakdown:
- Guaranteed Monthly Payout = (₹5,00,000 × 7.4) / 1200 = ₹3,083.33 per month
- Total Interest Earned = ₹3,083.33 × 60 months = ₹1,85,000
- Total Maturity Return = ₹5,00,000 + ₹1,85,000 = ₹6,85,000
Receiving regular monthly payouts from a government-backed scheme provides dependable recurring cash flow for retirees and conservative investors!
3. Frequently Asked Questions (FAQs)
1. Is the monthly interest earned from Post Office MIS taxable?
Yes, the monthly interest payouts received from a POMIS account are fully taxable according to your applicable individual income tax slab. However, there is no Tax Deducted at Source (TDS) deducted by the post office.
2. Can a Post Office MIS account be prematurely closed?
Yes, premature closure is allowed after 1 year from the deposit date, but penalty deductions apply (2% deduction from principal if closed between 1 and 3 years, and 1% deduction if closed between 3 and 5 years).
3. What is the maximum investment limit for Post Office MIS?
An individual can invest up to a maximum of ₹9 Lakhs in a single account, while joint accounts allow a higher ceiling of up to ₹15 Lakhs.
4. Can minors open a Post Office MIS account?
Yes, a minor aged 10 years or older can open a POMIS account in their own name, and guardians can open accounts on behalf of minors under 10 years.
5. Can monthly interest from POMIS be automatically credited to a savings account?
Yes, monthly interest payouts can be automatically auto-credited to a linked post office savings account or a commercial bank account through ECS.
6. What happens if the monthly interest is not withdrawn by the investor?
If unwithdrawn, unclaimed monthly interest does not earn any additional interest or compounding yield, so it is recommended to transfer payouts to an active savings account.
7. Are Post Office MIS investments backed by the Government of India?
Yes, all post office small savings schemes including MIS carry a 100% sovereign guarantee from the Government of India, ensuring total capital safety.
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