Is the Postal Service's Monthly Income Scheme Suitable for Senior Citizens?
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The Department of Posts regulates the Post Office Monthly Income Scheme (POMIS), a monthly savings plan (DOP). The Indian federal government is in charge of this savings initiative. This plan, like other post office modest savings schemes, aims to offer small and medium private investors a monthly income. This savings plan is a better option for people who desire a consistent income stream and a low-risk investment. Individuals who, like any other nationalized bank, have long utilized the Post Office as a safe haven for money deposits and transactions. This is especially true for the elderly in the country. At Post Office offices around the country, a variety of savings programs are offered. Continue reading to learn more about the Post Office Monthly Income Scheme (POMIS).
Features of the Postal Service's Monthly Income Scheme
Some of the elements of the Post Office Monthly Income Scheme are outlined below:
- The POMIS investing plan pays monthly interest on the money deposited. Individuals can withdraw at any time or set up an automated withdrawal and credit to their savings account.
- Individuals can only deposit multiples of Rs 1,000 into the POMIS account. As a result, the minimum deposit amount in many methods is Rs 1,000.
- A single account subscriber may only deposit up to Rs 4.5 lakh, however, a joint account subscriber can deposit up to Rs 9 lakh.
- In a single account or a joint account, an individual can invest a maximum of Rs 4.5 lakhs.
- Beginning April 1, 2020, the interest rate on the POMIS investment plan will be 6.6 percent per year, payable monthly.
- The account is locked in for 5 years from the date of opening.
- Once a year has passed, a person may withdraw. Premature withdrawals, on the other hand, incur a charge. If a person withdraws before the three-year period, they will be fined 2%. Furthermore, if a person departs after three years, the fee is only 1%.
Post Office Monthly Income Scheme Eligibility Criteria
POMIS was created for risk-averse people who don't want to invest in equities but yet want a consistent monthly income. It is well-suited to the demands of older folks and retirees who have just entered the no-paycheck zone and are willing to make a one-time investment in order to obtain a stable, regular income to maintain their standard of living. The sole stipulation is that the investor becomes a permanent resident of India. Non-resident Indians are not eligible for the Post Office Monthly Income Scheme. This post office savings plan's strongest advantage is that it has a ten-year entrance age limit. As a result, a ten-year-old youngster can open a POMIS account in his name. For minors, the maximum investment limit is set unilaterally.
Post Office Monthly Income Scheme Senior Citizens Benefits
Some of the advantages of the Post Office Monthly Income Scheme for elderly persons are listed below. -
- The Senior Citizen Savings Scheme is available through the Post Office (SCSS).
- Senior citizens receive a 7.4% yearly interest rate.
- Interest is paid quarterly, starting on the day of deposit and ending on the 31st of March/June, the 30th of September, and the 30th of December.
- Individuals must deposit a minimum of Rs 1000 in multiples of 1000 in each SCSS account they register, with a maximum limit of Rs 15 lakh.
- Investments made under this plan are eligible for a tax credit under Section 80C of the Income Tax Act of 1961.
Endnotes
The post office depository service provides a variety of safe investing options. All of these projects are backed by a sovereign guarantee, implying that they are government-sponsored. As a result, these plans are safer investment alternatives for people than stock shares and many fixed-income options.
Also read- Why Should You Join SBI's Senior Citizen Savings Plan?
