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Different investors have different priorities which revolve around their financial goals based on which they choose the investment schemes to invest in. And the investors who are looking for a regular monthly income are advised to opt for post office’s monthly income scheme (MIS) account.
As the recent announcement in the Budget 2023 raised the maximum deposit limit for these schemes from ₹4.5 lakh to ₹9 lakh for an individual’s account, and ₹15 lakh for a joint account, investors have got yet another reason to explore them as a viable investment instrument.
Here we give the lowdown on this scheme which is open to the young as well as old looking for a regular cash flow:
Post office monthly income scheme can be opened with a minimum contribution of ₹1,000 while the maximum limit is ₹9 lakh or ₹15 lakh (joint account) as the cash may be.
It is important to note that to calculate the maximum limit, all the account balances are added including the joint accounts. One joint account can have up to three adults.
Interest on the scheme:
The scheme’s current rate of interest with effect from Jan 1, 2023 is 7.1 percent per annum which is payable every month. Interest on monthly income scheme is payable on completion of a month from the date of opening until maturity.
Sample of form used to open account in a post office
If the interest payable is not claimed by the account holder, this interest would cease to earn any additional interest. In case any extra deposit is made by the depositor, this excess deposit will be returned to the investor. Interest is taxable in the hand of depositor.
Interest can be drawn through auto credit into savings account standing at same post office, or ECS (electronic clearing service). In case of MIS account at CBS (Core Banking Solution) post offices, monthly interest can be credited into savings account standing at any CBS post office.
How to discontinue?
The account can be closed on the expiry of 5 years from the date of opening by submitting prescribed application form with pass book at concerned post office.
The account can also be closed after more than one year of opening of account but this is subject to some deductions (one percent or two percent, as the case may be). Also, no deposit can be withdrawn before the expiry of one year from the date of deposit.