Post Office Monthly Income Scheme (POMIS) Review: Steady Monthly Cash Flow, Government-Backed
Pros
- Predictable monthly (not just quarterly) income
- No minimum age requirement, unlike SCSS
- Government-backed, zero default risk
- Simple, easy-to-open via post offices
Cons
- No Section 80C tax benefit on the deposit
- Interest fully taxable at the investor's slab rate
- Lower rate than SCSS or SSY currently
- Principal doesn't grow -- pure income scheme, not a compounding investment
How it works
POMIS takes a one-time lump-sum deposit and pays a fixed monthly interest amount for 5 years, after which the principal is returned. Unlike SCSS, it has no minimum age requirement, making it accessible to any adult investor.
Current rate
The scheme currently pays around 7.4% per annum, distributed monthly -- lower than SCSS or SSY, but useful specifically for the monthly (rather than quarterly) payout cadence, which suits some retirees' budgeting needs better.
Tax treatment
Interest is fully taxable at the investor's income slab, with no special exemption -- a straightforward, if not especially tax-efficient, income scheme. There's no Section 80C benefit on the initial deposit either.
Bottom line
A reasonable, low-risk option specifically for investors who want monthly (not quarterly or annual) income and don't need the higher rate or 80C benefit of other schemes. For most retirees, SCSS's higher rate makes it a stronger default where age eligibility (60+) is met.
Interest rate verified against government notifications and comparison-platform data as of mid-2026 -- the rate is reset quarterly; confirm the current rate before publishing.
