As the government has kept interest rates on small savings plans unchanged for the quarter ending September 30, the five-year monthly income plan will receive an interest rate of 6.6% per annum, payable monthly.
The Post’s Monthly Income Plan (POMIS) is a savings plan, in which you can invest a specific amount and earn a fixed interest each month. You can open such an account at any post office.
Any Indian resident can open a POMIS account. In addition, up to three adults can jointly open such an account. In addition, any minor over 10 years old can open a POMIS account in his name.
The minimum amount required to open this account is â¹1000. But, you can deposit a maximum of only â¹4.5 lakh in a single holder account; the limit is â¹9 lakh in a joint account, in which all holders have an equal share in the investment.
It is essential to note that interest is paid at the end of one month from the date of opening the account and continues until maturity. If you do not claim the interest paid each month, that interest will not earn additional interest. In addition, any deposit exceeding the set limits would be refunded. The excess sum deposited bears interest only at the rate of the postal savings account and it would be applicable from the date of opening of the account until the date of reimbursement or reimbursement.
You can also withdraw interest by automatic credit to your savings account. You can give the post office standing instructions or have it paid through the electronic clearing system. In addition, be aware that interest is taxable once received. This means that the amount of interest is not covered by section 80C of the Income Tax Act.
You can close the account after five years by submitting the prescribed application form with your passbook to the post office where you opened the account. However, if you die before the expiry of the POMIS account, it can be closed and the deposits refunded to your representative or legal heirs. In this case, interest would be paid until the previous month, in which time a refund is made. When opening an account, you must designate one of your family members, so that in the event of death during the term of the account, he can claim benefits.
You should also be aware that no deposit can be withdrawn before the expiration of one year from the date of deposit. However, if an account is closed prematurely after one year and before three years, a 2% capital deduction will be made, and the remaining amount will be paid to you.
If the account is closed between three and five years, a deduction of 1% of the principal would be made, and the remaining amount would be paid to you.
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