The Post Office Monthly Income Scheme (POMIS) does one thing well: it turns a lump sum into a fixed, guaranteed monthly payout for 5 years, with your original deposit returned untouched at the end. No market risk, no compounding complexity — just a number that shows up in your account every month.
[Use the POMIS Calculator above ↑] — enter your deposit amount to see your exact guaranteed monthly income.
For the October–December 2026 quarter, POMIS pays 7.4% per annum, paid out monthly rather than compounded. The Finance Ministry confirmed on 30 September 2026 that small savings rates are unchanged for this quarter, with no scheme revised since January 2024. Rates are reviewed every quarter, so always confirm the current rate at your post office before depositing, since this calculator can’t update itself automatically when the rate changes.
POMIS locks your deposit in more tightly than people expect:
Importantly, the penalty applies only to your principal — any monthly interest you’ve already received stays with you regardless of when you close the account. But losing 1-2% of a ₹9 lakh deposit is still ₹9,000-18,000, so POMIS is best treated as a genuine 5-year commitment, not a flexible parking spot for cash you might need sooner.
POMIS interest is fully taxable at your income tax slab rate under “Income from Other Sources” — there’s no Section 80C deduction on the deposit. Unlike bank FDs, post offices generally don’t deduct TDS on POMIS interest, though practice can vary, so confirm with your post office. Either way, the responsibility to declare the interest and pay tax on it falls on you. This trips people up: when no TDS is withheld, it can feel like “no tax,” but it isn’t — it just means nothing was withheld automatically.
If you don’t need the monthly payout for living expenses, POMIS interest can be redirected into a Recurring Deposit instead of sitting in your savings account — effectively letting you compound what would otherwise be a purely flat, non-compounding income stream. Use our RD calculator to see what that compounding could add up to over the same 5-year period.
| Feature | POMIS | SCSS | Bank FD (5-yr) |
|---|---|---|---|
| Current rate | 7.4% | 8.2% | ~5.9-6.5% at large banks (small finance banks up to ~8.25%) |
| Payout frequency | Monthly | Quarterly | Usually at maturity |
| Who can open | Any adult | 60+ only (55+ for some retirees) | Any adult |
| Maximum deposit | ₹9L single / ₹15L joint | ₹30L | No limit |
| 80C benefit | No | Yes | Only 5-year tax-saver FDs |
If you’re 60 or older, SCSS pays a meaningfully higher rate — POMIS is really the better fit for adults under 60 who specifically want a monthly income stream rather than SCSS’s quarterly payout.
What is the maximum I can invest in POMIS?
₹9 lakh in a single account, ₹15 lakh in a joint account with up to 3 holders.
Is POMIS interest tax-free?
No — it’s fully taxable at your income slab rate, though the post office generally doesn’t deduct TDS on it. Either way, you’re responsible for declaring it yourself.
Can I withdraw my POMIS deposit before 5 years?
Not within the first year. Between 1-3 years there’s a 2% penalty on your principal, and between 3-5 years it drops to 1%. Interest already paid to you is unaffected.
Does POMIS interest compound?
No — it’s simple interest, paid out monthly rather than added back to your principal. This is different from an FD, where interest often compounds if you don’t withdraw it.
See also our SCSS calculator and bank FD rates guide for other guaranteed-income options.
Sources: India Post official savings schemes page, Finance Ministry quarterly small savings notifications. Rate confirmed for the October–December 2026 quarter by the Finance Ministry’s notification of 30 September 2026. Rates are reviewed quarterly, so confirm the current figure before depositing.
