Post Office Monthly Income Scheme Calculator

A monthly income from one division

The Post Office Monthly Income Scheme does what its name says with unusual literalness. You deposit a sum, the government pays you interest every month for five years, and at the end you get the deposit back.

No growth, no compounding, no market. A fixed monthly payment and your capital returned.

Monthly income = (Amount invested × Annual interest rate) / 12

That is the entire calculation, and the tool rounds the answer to whole rupees because that is how the Post Office pays it.

Which is why the scheme is chosen almost exclusively by people who need a known amount arriving on a known date. Retirees covering monthly expenses, households wanting a predictable supplement. If you want your money to grow, this is the wrong product, because the interest leaves the account rather than staying in it.

The arithmetic is trivial. Everything worth knowing is in the rules around it.

The rate moves quarterly and yours does not

Here is the feature that makes POMIS behave differently from a bank deposit, and it cuts both ways.

The Ministry of Finance reviews small savings rates every quarter. The rate has been 7.4 percent a year, and that was the rate for the April to June 2026 quarter.

But once your account is open, your rate is fixed for the full five year term. Later revisions, in either direction, do not touch an account already running.

So the quarter you open in matters. Two people with identical deposits, opening six months apart, can receive different monthly amounts for five years because the rate was revised in between.

Two consequences worth acting on.

Check the current quarter's rate before you type anything. The rate field is yours to fill because a calculator cannot know which quarter you are in, and using last year's figure will give you a wrong monthly income for five years of planning. The Ministry publishes revisions and India Post carries the current figure.

If rates look likely to fall, opening sooner locks the higher one. If they look likely to rise, waiting has a value. Nobody knows which, but the lock is real and it is worth knowing you are making that bet either way.

The rate has moved over the years, so treat any figure you see quoted online, including on this page, as needing confirmation rather than as current.

How much you are allowed to put in

POMIS is a small savings scheme and the ceilings are part of its design.

Deposits go in multiples of ₹1,000. Those ceilings were raised in the 2023-24 Budget, from ₹4.5 lakh and ₹9 lakh respectively, which doubled the scheme's usefulness overnight for anybody with a larger corpus.

Three rules that sit underneath the headline numbers.

The limit follows the person, not the account. You may open several accounts, but your total across all of them cannot exceed ₹9 lakh. In a joint account each holder is treated as having an equal share for that purpose.

Which means a family can go well past either figure legitimately. Three people holding one joint account at ₹15 lakh plus a single account each at ₹9 lakh reaches ₹27 lakh between them, since each person's share still respects their own ₹9 lakh cap. At 7.4 percent that is ₹16,650 a month across the family.

Residency. The scheme is for Indian residents. Non-resident Indians cannot open an account.

One practical note about this calculator. It accepts the current ceilings, so a single account takes up to ₹9 lakh and a joint account up to ₹15 lakh. The arithmetic behind it is easy to check directly: multiply the amount by the rate and divide by twelve. Nine lakh at 7.4 percent is ₹66,600 a year, which is ₹5,550 a month.

Nine lakh, fifteen lakh, and what they pay

At the 7.4 percent rate, across the range that matters:

So the maximum a single holder can arrange for themselves is ₹5,550 a month, and a joint account at the ceiling produces ₹9,250.

Worth being clear eyed about what that is. Nine lakh locked away for five years, in exchange for five and a half thousand a month and your capital back at the end. Over the five years the interest totals ₹3,33,000, which is 37 percent of the deposit, undistributed and unchanging.

Whether that is good depends on inflation, and this is where the honest comparison lives. A 7.4 percent nominal return with inflation at 5 percent is a real return of about 2.3 percent, and our real rate of return calculator does that division properly. With inflation at 7 percent it is nearly nothing, and the monthly payment buys less each year while the number on the slip never changes.

That is not an argument against the scheme. It is an argument for knowing what it is: capital preservation with a predictable income, not growth.

Leaving before five years

The term is five years and the exit rules are strict enough to matter when you are deciding how much to commit.

On a ₹9 lakh deposit that is ₹18,000 in the first band and ₹9,000 in the second.

Put the first of those against the income it produces. Closing at eighteen months means you have received about ₹99,900 of interest and give back ₹18,000, so roughly a fifth of everything earned. Painful rather than ruinous, but enough that the first year lock is the real constraint: whatever you deposit is genuinely unavailable for twelve months.

Which suggests the sensible habit. Keep an emergency fund outside the scheme, and deposit only what you are confident you will not need. If you might need part of it, several smaller accounts opened at different times give you the option of closing one rather than all of it.

At maturity, if you do nothing, the deposit does not keep earning the POMIS rate. It sits and accrues interest at the Post Office Savings Account rate for two years, which is considerably lower. So maturity is a date to diarise rather than let pass.

The tax position, which surprises people twice

Two things about POMIS and tax, and they point in opposite directions.

The deposit gets no deduction. POMIS is not eligible under Section 80C. Money put in does not reduce your taxable income, unlike several other small savings schemes, which catches out people who assume all post office products behave alike.

The interest is fully taxable, but no TDS is deducted. Every rupee of monthly income is taxable at your slab rate. However, the Post Office does not withhold tax at source on it.

That second point is the one that causes trouble, because nothing is deducted and the money arrives whole, which makes it feel untaxed. It is not. You are responsible for declaring it and paying, and a full year of ₹5,550 a month is ₹66,600 of income to declare.

So the after tax monthly figure is lower than the number on this page. At a 20 percent slab, ₹5,550 becomes about ₹4,440 in your pocket, and at 30 percent about ₹3,885. Work out your own before treating the payout as household budget.

Aadhaar and PAN are now required to open an account, with a grace period for those without Aadhaar at the time of opening.

The interest that quietly does nothing

One structural feature worth a paragraph, because it is where most POMIS money is quietly lost.

The monthly interest is paid out. It does not stay in the account and it does not compound. If it lands in a linked savings account and sits there, it earns the savings rate, which is a fraction of what the deposit is earning.

Over five years that is a lot of idle money. ₹5,550 a month accumulating to ₹3,33,000 by the end, most of it having sat somewhere earning very little.

The standard fix is a standing instruction routing the monthly payout straight into a Post Office recurring deposit. That turns a stream of idle interest into a second, compounding pot, without you having to do anything each month. It is the single highest value thing a POMIS holder can set up, and it is set up once at opening.

Two smaller points. Interest can be credited automatically to a savings account by ECS if you arrange it at opening, which saves a monthly trip. And accounts transfer between post offices free of charge if you move city, which matters over a five year term.

Hope this makes the scheme's shape clearer than the monthly figure alone. Rates and limits are set by the Ministry of Finance and do change, so confirm the current quarter before committing, and do tell us if something here has gone out of date.

Questions people ask

What interest rate should I enter?

The rate for the current quarter, which the Ministry of Finance reviews every three months. It has been 7.4 percent a year, and that was the rate for the April to June 2026 quarter. Confirm the present figure with India Post before relying on a calculation.

If the rate changes, does my income change?

No. Your rate is fixed for the full five year term at whatever it was when you opened the account. Later revisions apply to new accounts only.

How much can I deposit?

Up to ₹9 lakh in a single account and ₹15 lakh in a joint account of up to three adults, in multiples of ₹1,000 from a minimum of ₹1,000. Your personal total across all accounts cannot exceed ₹9 lakh.

Why will it not accept my deposit amount?

The calculator's ceilings were set against the earlier limits of ₹4.5 lakh and ₹9 lakh. For a larger deposit, multiply the amount by the rate and divide by twelve, which is the same calculation.

Does the interest compound?

No. It is paid out monthly rather than added to the deposit, so the capital never grows. Routing the payout into a recurring deposit is the usual way to get compounding back.

Can I withdraw early?

Not within the first year. Between one and three years costs 2 percent of the deposit, and between three and five years costs 1 percent.

Is the income taxable?

Yes, fully, at your slab rate, and no tax is deducted at source. The deposit itself gets no Section 80C benefit.

Can NRIs invest?

No. The scheme is open to Indian residents only.

References

A note on the sources and on dates. POMIS is a government scheme whose interest rate is reviewed quarterly by the Ministry of Finance and whose deposit ceilings are set by Budget announcements, so every figure on this page carries a date rather than being permanent. The rate quoted, 7.4 percent a year, was the rate for the April to June 2026 quarter. The ceilings of ₹9 lakh single and ₹15 lakh joint were raised from ₹4.5 lakh and ₹9 lakh in the 2023-24 Budget. India Post is the authority for both, and anyone about to commit money for five years should confirm the current figures there rather than relying on any calculator page. Nothing here is financial or tax advice.

1. India Post, Department of Posts, Ministry of Communications, Post Office Savings Schemes: Monthly Income Scheme, the authoritative source for the current interest rate, deposit limits, premature closure rules and account opening requirements. https://www.indiapost.gov.in/Financial/Pages/Content/Post-Office-Saving-Schemes.aspx
2. Government of India, Ministry of Finance, Department of Economic Affairs, quarterly notifications revising interest rates on small savings schemes, under which the Monthly Income Scheme rate is set.
3. Government of India, Union Budget 2023-24, raising the Monthly Income Scheme deposit ceiling from ₹4.5 lakh to ₹9 lakh for single accounts and from ₹9 lakh to ₹15 lakh for joint accounts.
4. U.S. Securities and Exchange Commission, Office of Investor Education and Advocacy, Compound Interest, Investor.gov glossary, on why interest paid out rather than retained does not compound. https://www.investor.gov/introduction-investing/investing-basics/glossary/compound-interest