What is the current interest rate for Post Office MIS in 2026?

The interest rate for the Post Office Monthly Income Scheme (POMIS) is 7.4% per annum, payable monthly. The interest rate is reviewed and notified quarterly by the Ministry of Finance, Government of India.

What are the maximum deposit limits in Post Office MIS for single and joint accounts?

Under the revised small savings regulations, the maximum deposit limit is ₹9,00,000 for an individual single account and ₹15,00,000 for a joint account (opened by up to 3 adults with equal shares).

How much monthly pension/income will I get on depositing ₹9 Lakh or ₹15 Lakh in MIS?

At 7.4% per annum: A single deposit of ₹9,00,000 earns exactly ₹5,550 every month (₹66,600 annually). A maximum joint deposit of ₹15,00,000 earns ₹9,250 every month (₹1,11,000 annually). Over the complete 5-year tenure, total interest paid is ₹3,33,000 for ₹9L and ₹5,55,000 for ₹15L, while your principal remains 100% intact.

What are the rules and penalties for premature closure of a Post Office MIS account?

1) No withdrawal is permitted before completion of 1 year (12 months). 2) If closed between 1 year and 3 years from opening, 2% is deducted from the principal deposit and the balance is paid. 3) If closed between 3 years and 5 years, 1% is deducted from the principal deposit.

Is Post Office MIS interest taxable, and is TDS deducted?

The monthly interest earned in POMIS does not qualify for Section 80C deduction and is fully taxable under 'Income from Other Sources' at your applicable income tax slab rate. However, India Post does NOT deduct Tax Deducted at Source (TDS) on monthly interest distributions.

What is the MIS + RD Reinvestment Strategy and how does it create compound wealth?

In a standard MIS, monthly interest sits idle in a savings account earning only 4.0%. Under the MIS + RD strategy, you set up a standing instruction (ECS sweep) to automatically deposit the monthly MIS interest (e.g. ₹9,250) into a 5-Year Post Office Recurring Deposit (RD earning 6.7% quarterly compounded). At the end of 5 years, in addition to getting back your original ₹15 Lakh principal, the RD matures to approximately ₹6,60,940, delivering an effective compounded yield exceeding 8.8% p.a.

Post Office MIS Calculator 2026: Monthly Income Scheme Interest Payout & RD Re-Deposit

Quick Reference Matrix

Post Office MIS Deposit & Monthly Income Payout Matrix (7.4% p.a.)

Exact monthly interest earnings and 5-year cumulative totals based on the statutory simple interest formula.

Deposit Principal	Account Eligibility	Monthly Payout (7.4%)	Annual Interest	Total 5-Yr Earnings
₹1,00,000	Single / Joint	₹617	₹7,400	₹37,000
₹2,00,000	Single / Joint	₹1,233	₹14,800	₹74,000
₹4,50,000	Single / Joint	₹2,775	₹33,300	₹1,66,500
₹9,00,000 (Max Single)	Single Account Ceiling	₹5,550	₹66,600	₹3,33,000
₹12,00,000	Joint Account Only	₹7,400	₹88,800	₹4,44,000
₹15,00,000 (Max Joint)	Joint Account Ceiling	₹9,250	₹1,11,000	₹5,55,000

Post Office MIS vs Bank Monthly FD vs SCSS: Which is Best for You?

A comprehensive side-by-side analysis of sovereign safety, return predictability, and tax implications.

Key Advantages of Post Office MIS

• 100% Sovereign Guarantee: Backed directly by the Government of India, carrying zero credit default risk regardless of economic conditions.
• Zero TDS Deduction: Unlike commercial bank fixed deposits where 10% TDS is deducted at source if interest exceeds ₹40,000 (₹50,000 for seniors), India Post deducts zero TDS on monthly MIS payouts.
• Automated Savings Sweep: Seamless auto-credit of monthly interest directly into your Post Office Savings Account (POSA) or electronic transfer (ECS/NEFT) to any external bank account.
• Open to All Ages: Can be opened by any resident adult citizen, joint holders, or guardians on behalf of minors (above 10 years).

Important Constraints & Premature Rules

• 1-Year Complete Lock-in: No withdrawal or loan facility is permissible before completion of exactly 12 months from the account opening date.
• Premature Exit Deductions: If closed between 1st & 3rd year, a flat 2% penalty is deducted from the principal. If closed between 3rd & 5th year, a 1% penalty is deducted.
• No Section 80C Tax Rebate: Investments in POMIS do not qualify for deductions under Section 80C, and the monthly interest is fully taxable according to your personal income tax slab.
• Fixed 5-Year Maturity: Tenure cannot be extended automatically; account must be closed upon maturity or re-invested into a fresh scheme at current market rates.

Mathematical Calculation Formulas Explained

Transparent deterministic formulas applied by the Department of Posts for interest calculation, premature penalties, and RD wealth compounding.

1. Monthly Interest Payout Formula

The monthly interest payable is derived from the annual simple interest rate (currently 7.4% p.a.) divided equally into 12 calendar monthly distributions:

Monthly_Interest = (Principal × Interest_Rate) / (12 × 100)

Example for ₹9,00,000 Deposit:
(9,00,000 × 7.4) / 1200 = ₹5,550.00 per month

Total 5-Year Earnings:
5,550 × 60 months = ₹3,33,000.00

2. Premature Penalty & Net Refund Formula

If the account is closed before the completion of the 5-year tenure, the net principal refunded back to the account holder is calculated as:

Penalty = Principal × (Penalty_Rate / 100) Net_Refund = Principal - Penalty

Where Penalty_Rate is:
• 2% if closed between 1st and 3rd year (12 to 36 months)
• 1% if closed between 3rd and 5th year (36 to 60 months)
• Zero if closed at 5-year maturity

Frequently Asked Questions: Post Office MIS Scheme 2026

Essential regulatory, tax, and banking guidelines for Indian savers and retirees.

1. What happens if I do not withdraw the monthly interest from my MIS account? ▼

If the monthly interest is not claimed or withdrawn, it does NOT earn any additional interest in the MIS account. It is highly recommended to link your Post Office Savings Account (POSA) or provide an ECS standing instruction to auto-sweep the monthly interest into a 5-Year Recurring Deposit (RD) so that the money compounds actively instead of lying idle.

2. Can I convert a Single MIS account into a Joint account later, or vice versa? ▼

Yes, India Post allows the conversion of a single account into a joint account and a joint account into a single account by submitting the prescribed application along with the consent of all existing account holders, provided the statutory individual holding limit of ₹9 Lakh per individual is not breached.

3. How is the monthly interest transferred to my commercial bank account (SBI, HDFC, ICICI)? ▼

Post offices now operate on the Core Banking Solution (CBS). You can submit an ECS mandate along with a cancelled cheque of your commercial bank account. The monthly interest will automatically credit directly into your external bank savings account on the due date each month via National Automated Clearing House (NACH).

4. What is the tax liability on POMIS monthly earnings under the New Tax Regime? ▼

Under both Old and New Tax Regimes, the entire monthly interest earned from Post Office MIS is taxable under "Income from Other Sources". If your total annual income (including MIS interest) is below the taxable threshold (or ₹7,00,000 / ₹7,75,000 with standard rebate under Section 87A in the New Regime), your net tax liability will be zero.

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