Post Office Scheme: Get Rs 9,250 every month by depositing Rs 15 lakh; know these rules before investing..

Post Office Scheme: Amidst stock market volatility and global uncertainty, everyone wants to keep their money safe. If you are looking for a way to earn a guaranteed monthly income without any risk, the government’s small savings schemes are an excellent option. One such notable scheme is the Post Office Monthly Income Scheme (POMIS). This scheme protects investors from market risks and guarantees a fixed monthly return. By investing a lump sum of ₹15 lakh in this scheme, one can receive a fixed amount every month. However, before investing such a large sum, it is crucial to understand the rules, terms for joint accounts, tax implications, and the strict regulations regarding premature withdrawal.

The Math Behind a Monthly Income of ₹9,250
Currently, this Post Office scheme offers an annual interest rate of 7.4%, which is paid out monthly. A key advantage is that the interest rate, once fixed at the time of account opening, remains unchanged for the entire 5-year tenure. One can begin investing with as little as ₹1,000. For a joint deposit of ₹15 lakh, the 7.4% annual interest rate yields a total of ₹1,11,000 per year. When divided by 12 months, this results in a guaranteed monthly income of ₹9,250 for the investor. Over the 5-year lock-in period, you would earn a total of ₹5.55 lakh solely from the interest. Upon maturity—after the 5-year term—the entire principal amount of ₹15 lakh is returned to you.

Cannot Deposit ₹15 Lakh as an Individual
People often wonder whether an individual can deposit ₹15 lakh on their own. The answer is ‘no.’ According to the rules, the maximum investment limit for an individual holding a single account is set at ₹9 lakh. If you wish to deposit ₹15 lakh and avail the full monthly benefit of ₹9,250, you must open a joint account. A joint account can include up to three adults and allows for a maximum deposit of ₹15 lakh.

Know these rules before investing.
It is crucial to understand the investment limits before putting in your money. While a joint account has a limit of ₹15 lakh, all account holders are considered to have an equal share. In any case, an individual's total share (across all MIS accounts combined) cannot exceed ₹9 lakh. Some people may think they can bypass this limit by opening multiple accounts at different post offices, but this is not possible. The limit applies per person, not per account. Furthermore, the scheme carries a strict 5-year lock-in period; you cannot withdraw any funds during the first year after opening the account.

Rules regarding premature withdrawal and taxation
There are strict regulations in place should you require funds unexpectedly. If you close the account after one year but before the completion of three years, a 2% deduction will be applied to your principal amount. If you withdraw funds after three years but before the five-year mark, a 1% deduction will be applied to the principal. Regarding taxation, the interest earned from this scheme is fully taxable. It will be added to your total income and taxed according to your applicable tax slab. Additionally, under the old tax regime, this scheme does not qualify for any deductions under Section 80C.

The objective of this government scheme is to provide investors with a fixed monthly income, rather than to help them accumulate a large corpus. Always keep one important point in mind: if you do not withdraw the monthly interest from your account, the Post Office does not pay any additional interest on that accumulated interest.