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With the government leaving interest rates on small savings schemes unchanged for July-September 2021, the post office monthly income scheme (POMIS) with five-year tenure, seems to be a good investment option for those who are risk-averse and are looking for regular monthly income.
The scheme currently offers interest rate of 6.6 per cent per annum, payable monthly, for the deposits made up to September 30, 2021. The minimum investment amount is ₹1,000. The maximum limit is ₹4.5 lakh in a single account and ₹9 lakh in a joint account (up to three adults).
POMIS scores over other similar options such as fixed deposits of similar tenure offered by banks. There is no default risk attached to the capital invested in POMIS as there is implicit backing of the government. With banks, deposits of up to only ₹5 lakh are covered by the deposit insurance.
If you are a senior citizen, the Senior Citizens Savings Scheme (SCSS) gives only quarterly payouts. If you are keen on monthly income, the POMIS may be an ideal fit. You may want to compare it with another safe investment option - Pradhan Mantri Matri Vandana Yojana, which provides an assured pension of 7.40 per cent per annum (same as SCSS) payable monthly. However, the POMIS can be your option if you are looking for shorter tenure, liberal lock-in norms and lower minimum investment amount.
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