As the name suggest, individuals who need steady income flow on a monthly basis can park their money in this Monthly Income Scheme of Post Office. This is amongst the best investment options for building your retirement corpus during times when interest rate on deposits across banks for senior citizens has seen a drop.
Recently, the state run lender SBI on its FD scheme for senior citizens slashed rates to 6.75% whereas the MIS scheme fetches you a handsome 7.5%, which is a premium of 75 basis points. And as the rate or return from MIS scheme gets locked in for a period of 5 years, investors are saved from the hassles involved in reinvestment of the capital amount. Sovereign guarantee is yet another feature that makes the investment option a must have product in an individual's retirement portfolio.
Few of the important points to note in respect of Post office MIS
Resident individuals Senior can open the MIS account and is best suited for senior citizens and retired folks. NRIs and HUFs cannot open the MIS account.
A minimum sum of Rs. 1500 can be invested in MIS and subsequently investors can increase their investment in same multiples thereafter.
For individuals maximum investment is of Rs. 4.5 lakhs while in joint account a maximum of Rs. 9 lakhs can be invested.
No deductions in respect of the deposit made towards MIS can be claimed u/s 80C
Premature closure of the account is possible after 1 year and a deduction of 1% or 2% is charged on deposit in case the premature withdrawal is made after or before 3 years respectively. Withdrawal in case of death levies no such premature withdrawal charges.
Interest on a month-on-month basis can be either directly collected from the post office or transferred to a post office or bank's savings account. So with dependable stream of money for your monthly needs as well as flexibility the product offers, MIS scheme is an attractive product for senior citizens.