Stock markets remains volatile this year so far with key benchmark indices– Sensex and Nifty–nearly 5 per cent this year so far till November 9, 2026. Meanwhile, if you are a risk avert investors want to have a regular risk free fixed income on your investment, government backed Post Office Monthly Income Scheme could be a great choice for you.
With a one-time corpus of 15 lakh in a joint account with your wife or a family member, a monthly interest of Rs 9,250 can be earned. The maturity lock-in period for the investment is five years, meaning Rs 5.55 lakhs could be earned as interest throughout the tenure.
What Is the Interest Rate On Deposits in the Post Office Monthly Scheme
The interest rate for deposits in the Post Office Monthly Income Scheme is 7.4% per annum, paid monthly. The interest rate applicable at the time of account opening remains fixed for the entire 5-year term. A citizen can start investing in this scheme with a minimum of Rs 1,000.
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Earnings Details
A deposit of Rs 15 lakh in a joint account at 7.4 per cent yields a total interest of Rs 1,11,000 per year.
Details | Amount / Duration |
|---|---|
Joint Account Deposit | Rs 15,000,000 (at 7.4%) |
Annual Interest | Rs 1,11,000 per year |
Monthly Income | Rs 9,250 |
Lock-in Period / Total Interest (5 Years) | Rs 5.55 lakh total interest earned over 5 years |
Principal Repayment | Repaid at maturity (Rs 15 Lakh) |
Why A Joint Account Is Needed To Deposit Rs 15 lakh
- The maximum investment limit for a single account holder is Rs 9 lakh, so if you have to deposit Rs 15 lakh, you will need to open a joint account.
- A joint account can include up to three adults
- Meanwhile, a depositor cannot exceed their total limit by opening multiple accounts at different post offices.
Things To Notice Before Investing
- Understand the investment ceiling: A Rs 15 lakh limit applies to joint accounts.
- All account holders are considered to have equal shares.
- You can not open multiple accounts at different post offices.
- Strict 5-year lock-in period, meaning a 5-year maturity period.
Will You Pay Tax On Earnings
Interest earned from the Monthly Income Scheme is subject to income tax and the same can be taxed according to your tax slab. Furthermore, under the old tax regime, this deposit is not eligible for any tax deduction under Section 80C.
Premature Withdrawal Penalty
If a depositor chooses to close the account after 1 year but before 3 years, 2 per cent will be deducted from the principal. If youb the premature withdrawal happens after 3 years but before 5 years, 1 per cent will be deducted.