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Emergencies can come unexpectedly, whether it's a surprise medical crisis, a child's school fee burden, or an unexpected loan repayment. Your side earnings and savings can act as a pillar of strength, providing a cushion against life's uncertainties.

So, what's the best way to get a steady and secure monthly income without taking risks? Here, the first thing that comes to mind is bank and post office schemes because of their guaranteed returns.

In this article, we will talk about the Post Office Monthly Income Scheme (POMIS). The POMIS is a secure option to increase your savings and create a steady income. With a 7.4 per cent interest rate, it can be a valuable addition to your financial portfolio, helping you navigate life's uncertainties with greater ease.

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Post Office MIS requires a 5-year lock-in period for steady monthly returns. The interest generated per month will be credited to your account every month, and after a minimum period of five years, you can withdraw your principal after maturity. This way, your money is protected and you can earn interest on it.

The maximum deposit limit is different for all. You can deposit a maximum of Rs 9 lakh in a single account, but this limit increases to Rs 15 lakh in a joint account. If you deposit Rs 15,00,000 in a joint account, you can earn Rs 9,250 per month at 7.4 per cent interest.

Although it could be the best option for senior citizens, especially those relying on a fixed pension or living without a regular income, financial stability is paramount. The Post Office Monthly Income Scheme offers a reliable solution, providing a fixed monthly income to meet daily needs while keeping the principal amount safe and intact.

If you invest Rs 15,00,000 in a joint account, you will earn Rs 9,250 per month at 7.4 per cent interest.

In this case, your monthly earnings will be Rs 15,00,000 x 7.4 / 100 / 12 = Rs 9,250.

Rs 9,250 x 12 = Rs 1,11,000/year (approx.) In five years, you will earn a total of Rs 1,11,000 x 5 = Rs 5,55,000.

There is a condition, if you need your money for some reason before the completion of your 5-year period. The condition is that you cannot withdraw the money for one year. After one year, you will be able to withdraw the money, but a premature withdrawal penalty will apply.

If you withdraw your money between 1 and 3 years, then a penalty of two per cent and between 3 and 5 years, a penalty of 1 per cent will be applied on the amount.

Let's understand with an example. Suppose you have invested Rs 15,00,000 and want to withdraw the money after 2 years, a 2 per cent penalty will be applied. 2 per cent of Rs 15,00,000 is Rs 30,000, resulting in a loss of the entire Rs 30,000.

Whereas, if the amount is withdrawn after three years and before 5 years, a 1 per cent penalty will result in a loss of Rs 15,000. However, this calculation is based on a deposit of Rs 15,00,000. If you invest less than this amount, two per cent and one per cent of the amount will be applied accordingly. Therefore, if you invest in the scheme, try not to disturb it for the first five years.

Opening an account under the Post Office Monthly Income Scheme is easy. You should be a citizen of India. If the child is under 10 years of age, you can open a minor account. The parent will operate the child's account. Secondly, you must have a savings account with the Post Office. It is mandatory to have an Aadhaar card and a PAN card.

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Akanksha

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