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National Savings Monthly Income Account Rules Explained

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The POMIS (post office monthly income scheme) is a small savings scheme that allows you to contribute a fixed amount and earn a predetermined interest rate every month. The five-year monthly income scheme will earn an interest rate of 6.6 per cent per annum, payable monthly, thanks to the government's decision to keep interest rates on small savings schemes untouched for the quarter ending September 30. But just for a comparison, it is significantly lower than the SBI's Annuity Deposit Scheme, which is currently fixed at 5.40 per cent. This consideration makes the POMIS account one of the best and secure monthly income schemes for risk-averse investors, especially senior citizens. So, if you want a POMIS account at your nearest post office, here are the rules of India Post that you need to follow:

 

Account opening rules

Account opening rules

A single adult, up to a limit of three individuals in joint names, a minor above the age of ten, a guardian on behalf of a minor, or a person of unsound mind can establish the account by submitting the account opening form at any post office. Under this scheme, an individual can establish and run one or more accounts as a single account or a joint account, subject to the maximum contribution ceiling. The account holder's contribution of the amount of a joint account shall be treated as one half or one-third of the deposit, as if the account were maintained by two adults or three adults, for the purpose of maximum deposits stated below.

Deposit rules
 

Deposit rules

The POMIS can be established with a minimum deposit of one thousand rupees or an amount in multiples of one thousand rupees, and each account can only have one deposit. A total of four lakh fifty thousand rupees can be contributed in a single account, and nine lakh rupees can be placed in a joint account by the account holders. This indicates that an individual's total deposits in all accounts should not surpass Rs 4.5 lakhs in a single account and Rs 9 lakhs in a joint account, respectively.

Interest on deposit rules

Interest on deposit rules

The current interest rate on the deposit made under this scheme is 6.6 per cent per year, payable on a monthly basis. On the completion of a month from the date of account opening, interest will be paid to the account holder. In case the account holder does not claim the monthly interest, the interest will not accrue any more interest. If an account holder deposits in his or her account above the upper limit discussed above, the responsible post office will return the surplus deposit to the account holder.

The surplus deposit shall earn interest at the rate prevailing to the Post Office Savings Account at the time of contribution and shall be payable to the depositor on such surplus amount. The interest is payable from the time the surplus amount is deposited until the end of the month before the month in which the contribution is refunded to the account holder. The taxable interest amount shall be credited into a savings account established at the same post office or into an ECS account of the account holder.

Premature withdrawal rules

Premature withdrawal rules

The account holder will be allowed to withdraw the balance and close the account at any time after a year has passed since the account was opened by submitting an application form and passbook to the relevant post office. An amount equal to 2% of the deposit will be deducted if the account is closed after the account holder before 3 years of the account opening date. If the account is closed after 3 years but before 5 years from the date of inception, a 1% penalty from the principal amount will be deducted, and the remaining balance shall be credited to the account holder.

Account maturity rules

Account maturity rules

The concerned post office will provide you with the deposit made at the time of account opening, as well as interest earned, once five years have passed since the account was opened. The account can be permanently terminated after 5 years by submitting a required application form with a passbook to the concerned Post Office, and the maturity amount can be withdrawn respectively by the account holder.

If the account holder passes away before the maturity date, the account can be closed by the responsible nominee/legal heirs and the maturity proceeds can be claimed by them. The account user should keep in mind that the deposit amount, plus interest, can be withdrawn up to the month preceding the month in which the refund is issued.

Read more about: small savings scheme
Story first published: Monday, July 5, 2021, 12:38 [IST]
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