Find the monthly interest from a Post Office Monthly Income Scheme deposit at the current 7.4% rate, for single and joint accounts, and what closing it early costs.
Loading the latest scheme rates…
The Post Office Monthly Income Scheme (MIS, often written POMIS) is a small savings scheme run by India Post on behalf of the Government of India. You deposit a lump sum once, and the post office pays you interest every month for 5 years. At the end of the term, the full deposit comes back to you.
The rate is set by the Ministry of Finance every quarter. For 1 Oct 2026 – 31 Dec 2026 it is 7.4% a year. Once you open an account, that rate is locked in for the full 5 years, even if later quarters change it.
Because the government backs it, MIS suits people who want a steady, predictable income — retirees, people living off savings, or anyone parking a sum they don’t want exposed to market swings.
The minimum deposit is ₹1,000, and amounts go in multiples of ₹1,000. A single account can hold up to ₹9,00,000. A joint account, held by up to 3 adults, can hold up to ₹15,00,000.
A joint account’s interest isn’t split between the holders. India Post credits the whole monthly payout to one linked Post Office Savings Account — either a joint savings account held by the holders, or a single savings account of one of them.
The single limit applies to the person, not the account: all your MIS deposits, including your equal share of any joint account, must add up to no more than ₹9,00,000. A guardian can open an account for a minor, and a minor aged 10 or more can open one in their own name; that account has its own ₹9,00,000 limit.
All four use the current 7.4% rate and run the full 5 years.
| Deposit | Monthly income | Interest over 5 years |
|---|---|---|
| ₹1 lakh, single account (₹1,00,000) | ₹617 | ₹37,000 |
| Half the single limit (₹4,50,000) | ₹2,775 | ₹1,66,500 |
| Single account at the ₹9,00,000 limit (₹9,00,000) | ₹5,550 | ₹3,33,000 |
| Joint account at the ₹15,00,000 limit (2 holders) (₹15,00,000) | ₹9,250 | ₹5,55,000 |
Interest is simple, not compounded: the monthly amount stays exactly the same for all 60 months. Every lakh deposited pays about ₹617 a month.
You can’t close an MIS account in the first 1 year. After that, you can close it early, but part of the deposit is deducted:
The monthly interest you have already received is not taken back. So closing early usually still leaves you ahead of where you started, just by less than holding on would.
At 7.4%, a ₹9,00,000 single account pays ₹5,550 a month. This is where you stand if you close it at different points:
| Closed after | Deducted from the deposit | Interest received | You are ahead by |
|---|---|---|---|
| 12 months | ₹18,000 (2%) | ₹66,600 | ₹48,600 |
| 24 months | ₹18,000 (2%) | ₹1,33,200 | ₹1,15,200 |
| 35 months | ₹18,000 (2%) | ₹1,94,250 | ₹1,76,250 |
| 36 months | ₹9,000 (1%) | ₹1,99,800 | ₹1,90,800 |
| 48 months | ₹9,000 (1%) | ₹2,66,400 | ₹2,57,400 |
| 60 months (maturity) | Nothing | ₹3,33,000 | ₹3,33,000 |
Closing in month 36 rather than 35 cuts the deduction to 1% and adds one more month’s interest: ₹14,550 more in hand. If you may need part of the money before 5 years, keep that part in a recurring deposit or a shorter fixed deposit and put only the rest in MIS.
| Option | Income | Term | Safety | Best for |
|---|---|---|---|---|
| Post Office MIS | Monthly, fixed | 5 years | Government-backed | Steady monthly income |
| Senior Citizens’ Savings Scheme | Quarterly, fixed | 5 years | Government-backed | People aged 60+ (usually a higher rate) |
| Bank fixed deposit (monthly payout) | Monthly, fixed | Flexible | Insured up to ₹5 lakh per bank | Flexible terms, any amount |
| Mutual fund SWP | Monthly, you choose | Open-ended | Market-linked | Longer horizons, inflation-beating aims |
MIS gives no tax break on the way in. The deposit doesn’t qualify for a deduction under section 123 of the Income-tax Act, 2025 (the old Section 80C). The deposit you get back at maturity is your own money, so it isn’t taxed.
The interest is taxable. It is added to your income as “income from other sources” and taxed at your slab rate. It is taxed year by year as it is paid, not in one go at maturity: a ₹9,00,000 account adds ₹66,600 to your income every year. Report it in your return even when no tax was deducted, because the interest shows up in your Annual Information Statement (AIS).
The post office deducts TDS at 10% only when the interest it pays you on all your post office deposits in a financial year crosses ₹50,000, or ₹1 lakh if you are 60 or older. TDS isn’t your final tax. You still owe your slab rate on the interest, and any excess TDS comes back as a refund when you file your return.
The interest itself is never exempt, but you pay no tax on it if your total income stays low enough. These rules are for FY 2026-27:
If your total tax for the year will be nil, give the post office a self-declaration so it doesn’t deduct TDS at all. From 1 April 2026 this is Form 121, which replaced Form 15G (under 60) and Form 15H (60 and older). Submit it at the start of each financial year.
For 1 Oct 2026 – 31 Dec 2026 the Post Office Monthly Income Scheme pays 7.4% a year.
At 7.4%, the interest paid every month is:
The amount stays the same every month, and the deposit comes back in full at maturity.
Yes, after the first 12 months. A part of the deposit is deducted:
Interest already paid to you is not taken back.
Less than the interest you keep. On a ₹9,00,000 deposit at 7.4%:
Closing in month 36 instead of 35 drops the deduction to 1% and leaves you ₹14,550 better off.
The limits depend on the account type:
Any resident Indian can open one:
Non-resident Indians (NRIs) can’t open an MIS account.
Yes, at any post office and in any number.
No. Each MIS account takes one deposit when it is opened. To invest more, open another account, staying within your individual limit.
The post office refunds the extra amount. It earns only the Post Office Savings Account rate from the day you deposited it until the refund, not the MIS rate.
Up to 3 adults can hold one joint account, with a deposit of up to ₹15,00,000.
They differ in who can operate the account. You choose the mode when you open it.
Yes. The interest is fully taxable.
You can still pay no tax on it if your total income is within the rebate or the exemption limit.
The interest is never exempt in itself, but you pay no tax on it when your total income is low enough:
Every year. Interest is taxed in the financial year it is paid to you, so each year’s return includes about 12 months of MIS interest. The deposit returned at maturity isn’t taxed.
Only when the interest it pays you on all your post office deposits in a financial year crosses:
TDS is then 10% if you have given your PAN. A ₹9,00,000 single account pays ₹66,600 a year, above ₹50,000, so TDS can apply below 60.
Give the post office a self-declaration that your tax for the year will be nil.
Yes, in the old regime.
Whoever put the money in, in proportion to what each person contributed.
No. MIS pays simple interest every month and does not reinvest it. If you want growth, move the monthly interest into a recurring deposit or a SIP yourself.
Interest you leave uncollected earns nothing extra. To keep it working:
Interest is paid at the end of each month, counted from the date you open the account, for 60 months.
After 5 years the full deposit is returned to you. You can reinvest it in a new MIS account at the rate on offer at that time.
The account can be closed before maturity without any deduction.
Add a nominee when you open the account so the claim is simple.
Yes. It is a Government of India small savings scheme.
MIS pays simple interest on the deposit every month. The annual rate is divided by 12 and applied to the same deposit each month; nothing is added back to the principal.
For an early closure, the deduction band depends on how many months the account was open. A joint account’s income isn’t split: it is paid in full to one linked savings account. Only the deposit is shared equally, and only for the individual limit.
Monthly income
Deposit × annual rate ÷ 12
Total interest
Monthly income × 60 months
Joint holder’s deposit share
Deposit ÷ holders (counts toward the individual limit)
Early closure
Deposit − (deposit × deduction rate) + monthly income × months held
SIPCafe's calculators and guides are for education and planning only and are not investment, tax or legal advice. Results are estimates based on the assumptions you enter; actual returns vary and are not guaranteed. Consider speaking with a qualified financial adviser before making investment decisions. SIPCafe is not a registered investment adviser and does not recommend any specific security, fund or scheme. All investments carry market risk; read a fund's or scheme's official documents carefully before investing.
Rates come from the latest official notification or the bank's own rate page, as shown on this page. The government revises small savings rates every quarter and banks can change theirs at any time, so confirm the current rate with the Post Office or your bank before you invest.
Put your Post Office MIS interest into an RD and ₹9 lakh grows to ₹12.96 lakh in 5 years, ₹63,080 more than MIS alone. How the combo works and when an FD beats it.