terican

Last verified · v1.0

Calculator · finance

Post Office Monthly Income Scheme (Pomis) Calculator

Calculate POMIS monthly income, total interest, and maturity value instantly. Enter your principal and see guaranteed returns at 7.4% p.a. over 5 years.

FreeInstantNo signupOpen source

Inputs

Monthly Income

—

Explain my result

0/3 free

Get a plain-English breakdown of your result with practical next steps.

Monthly Income—

The formula

How the
result is
computed.

What Is the Post Office Monthly Income Scheme (POMIS)?

The Post Office Monthly Income Scheme (POMIS) is a government-backed small savings instrument offered through India Post under the Post Office Saving Schemes portfolio. It provides a fixed, guaranteed monthly income on a one-time lump sum deposit, making it one of the most trusted low-risk income-generating tools for retirees, senior citizens, and conservative investors across India.

POMIS Formula Explained

The post office monthly income scheme calculator applies two straightforward formulas to compute monthly income and total returns:

  • Monthly Income (M): M = (P × r) / (12 × 100)
  • Maturity Value (T): T = (M × 12 × t) + P

Variables used in the formula:

  • P — Principal, the lump sum deposited in multiples of ₹1,000
  • r — Annual interest rate (currently 7.4% per annum as notified by the Ministry of Finance)
  • t — Tenure in years (fixed at 5 years)
  • M — Monthly income paid to the depositor each month
  • T — Total maturity value: principal returned plus all interest earned

Formula Derivation and Methodology

POMIS pays simple interest, not compound interest. The annual interest earned on principal P at rate r% equals (P × r) / 100. Dividing this figure by 12 yields the equal monthly instalment. Over the 5-year term (60 months), total interest accumulated equals M × 60. At maturity, the original principal is returned intact. This transparent calculation structure is documented in the National Savings Monthly Income Account guidelines published by NSI India and confirmed by the Department of Economic Affairs — Small Savings Schemes portal, ensuring returns are fully predictable from the day of deposit.

Key Variables and Deposit Limits

Investment Amount (Principal)

Deposits must be made in multiples of ₹1,000. The minimum deposit is ₹1,000. The maximum for a single account is ₹9,00,000, while a joint account permits up to ₹15,00,000 combined. A single investor may hold both a solo and a joint account, but their individual share across all POMIS accounts must not exceed ₹9,00,000.

Annual Interest Rate

The government revises POMIS interest rates on a quarterly basis. The prevailing rate stands at 7.4% per annum, credited to the depositor's linked post office savings account every month. No Tax Deducted at Source (TDS) is applied by India Post, giving investors flexibility in managing annual tax declarations.

Tenure and Premature Closure

The scheme carries a fixed 5-year maturity. Premature closure is permitted after the first year: a 2% penalty on the principal applies for withdrawals made between years 1 and 3, reducing to a 1% penalty for withdrawals between years 3 and 5. Closure within the first year is not permitted under any circumstances.

Account Type

Joint accounts allow up to 3 adults to hold a single POMIS account together. Each holder's share is treated as equal for interest computation. The combined ₹15,00,000 ceiling applies to the entire joint account, not per individual holder.

Worked Examples

Example 1 — Mid-Range Single Account

Principal: ₹5,00,000 | Rate: 7.4% p.a. | Tenure: 5 years

  • Monthly Income = (5,00,000 × 7.4) / 1,200 = ₹3,083.33 per month
  • Total Interest (60 months) = ₹3,083.33 × 60 = ₹1,85,000
  • Maturity Value = ₹5,00,000 + ₹1,85,000 = ₹6,85,000

Example 2 — Maximum Single Account

Principal: ₹9,00,000 | Rate: 7.4% p.a. | Tenure: 5 years

  • Monthly Income = (9,00,000 × 7.4) / 1,200 = ₹5,550 per month
  • Total Interest = ₹5,550 × 60 = ₹3,33,000
  • Maturity Value = ₹12,33,000

Example 3 — Maximum Joint Account

Principal: ₹15,00,000 | Rate: 7.4% p.a. | Tenure: 5 years

  • Monthly Income = (15,00,000 × 7.4) / 1,200 = ₹9,250 per month
  • Total Interest = ₹9,250 × 60 = ₹5,55,000
  • Maturity Value = ₹20,55,000

Who Should Use POMIS?

  • Retirees and pensioners seeking a reliable monthly cash flow without market risk
  • Conservative investors who prioritise capital safety and guaranteed sovereign-backed returns over equity growth
  • Supplemental income seekers — homemakers, freelancers, or part-time workers needing a predictable monthly top-up
  • Tax-aware investors — while POMIS interest is taxable as income from other sources, no TDS is deducted, allowing strategic annual declarations

Reference

Frequently asked questions

What is the current POMIS interest rate and how often does it change?
The current POMIS interest rate is 7.4% per annum as of the latest quarterly revision by the Ministry of Finance. The Government of India reviews small savings scheme rates every quarter — in January, April, July, and October. Crucially, investors who open an account lock in the rate prevailing on the date of deposit for the entire 5-year tenure, so subsequent revisions do not affect their monthly income.
What is the maximum amount that can be invested in a POMIS account?
For a single POMIS account, the maximum investment limit is Rs 9,00,000. For a joint account held by up to 3 adults, the combined ceiling rises to Rs 15,00,000. A single individual may hold a joint account in addition to a solo account, but their individual share across all POMIS accounts combined must not exceed Rs 9,00,000. The minimum deposit is Rs 1,000, and all amounts must be in multiples of Rs 1,000.
How is the monthly income from POMIS calculated using the formula?
POMIS monthly income uses simple interest, not compound interest. The formula is M = (P x r) / (12 x 100), where P is the principal and r is the annual interest rate. For a deposit of Rs 5,00,000 at 7.4% per annum, monthly income equals (5,00,000 x 7.4) / 1,200 = Rs 3,083.33. This fixed amount is credited to the depositor's linked post office savings account every month for the full 5-year tenure.
Can a POMIS account be closed before the 5-year maturity date?
Yes, premature closure of a POMIS account is allowed after completing 1 full year from the date of account opening. Withdrawals made between 1 and 3 years attract a penalty of 2% of the principal, which is deducted before the refund. Withdrawals made between 3 and 5 years attract a reduced penalty of 1% of the principal. Closure within the first year is strictly not permitted, and monthly interest already paid out is not clawed back upon premature closure.
Is the interest earned on POMIS taxable under Indian income tax law?
Yes, POMIS interest is fully taxable in India and must be declared as income from other sources in the depositor's annual income tax return. India Post does not deduct Tax Deducted at Source (TDS) on POMIS interest payments, which gives investors flexibility to plan their tax liability across financial years. Investors in higher income tax brackets (20% or 30%) should calculate their effective post-tax yield carefully before choosing POMIS over other instruments.
What is the difference between a single and a joint POMIS account?
A single POMIS account is held by one individual and carries a maximum deposit ceiling of Rs 9,00,000. A joint account allows 2 or 3 adults to hold the account together, raising the combined deposit limit to Rs 15,00,000. In a joint account, each holder's share is assumed to be equal when applying the per-person deposit cap. Monthly income is paid into a jointly held post office savings account, making joint POMIS accounts particularly popular among married couples seeking a higher combined monthly payout.