Post Offices MIS
Post Offices MIS

Post Office Monthly Income Scheme, also known as Post Offices MIS or POMIS, is a government investment scheme that can offer you interest returns through monthly payouts. The interest rates are reviewed and fixed every financial quarter.

As per the Union Budget of 2023, the deposit limit was increased to ₹9 Lakhs from ₹4.5 Lakhs. Joint accounts saw an increase in deposit limits to ₹15 Lakhs. Until 31st March 2023, you can grab an interest rate of 7.1%.

How Can You Calculate Monthly Interest Payout?

With all the right tools to calculate your monthly interest payout accessible across the internet, computing such numbers is now a matter of seconds! Here's how you can work this out effectively without any hassle.

  • Step 1: Start firing up the calculator portal on your device
  • Step 2: Fill in the principal amount, which is your deposit amount
  • Step 3: Enter the number of years for which you would like to keep your POMIS active
  • Step 4: Set the rate of interest
  • Step 5: Your monthly interest payout should be displayed on your screen

For example, let's say your principal amount is ₹3,00,000, the tenor or the number of years is 5 years, and your interest rate is 6.6%. Your monthly interest return should be ₹1,650. Multiplying this monthly payout into 60 months, you would receive a total interest return of ₹99,000 over 5 years.

How Can You Convert Annual Interest into Monthly Interest?

The manual calculation to convert an annual interest payout into a monthly interest payout is a very easy 3-step process. Here's how you can do it.

  • Step 1: Divide the annual interest rate by 100
  • Step 2: Divide that solution by 12 to derive a monthly interest amount
  • Step 3: Multiply this value by 100 to convert it into a percentage

That's how you can convert your annual interest payout into a monthly interest payout. Let's understand this calculation with an example.

Let's assume that your deposit amount is ₹5 Lakhs, and your interest rate is 7.0%. Following the steps above, your calculation with the aforementioned values should look like this.

7%/100 = 0.07%
0.07%/12 = 0.0058%
0.0058% x 100 = 0.58%

Hence, your monthly interest rate would be 0.58%. If you multiply your monthly interest rate by your deposit amount, your monthly interest return would be derived as ₹2,900.

Benefits of a Post Office Monthly Income Scheme Investment

  • You get a monthly income. Your monthly interest payout will be an amazing way of making extra money to add to your savings or other investments.
  • You get an overdraft facility. Against your monthly payout deposit investment, you can get an overdraft facility which allows you to get a loan up to 90% of your deposit amount.
  • You get a nomination facility. You can enlist an extra beneficiary to your investment to turn it into a joint monthly interest payout account.
  • You get to withdraw the money whenever you want to. There could be a time when you would need to liquidate this asset to use it for emergencies, which can be ensured with a monthly interest payout investment.
  • You get steady returns. Most investments are directly linked to market fluctuations. However, such fluctuations won't affect investments like this one since the interest rate decided at the beginning of your investment will remain the same until maturity or foreclosure.

Conclusion

We all know just how important it is to have an investment plan that offers steady, sturdy, and guaranteed returns. We need an investment that is a little less stressful than every other market-linked investment, which is a total rollercoaster. Hence, investments such as FDs and Post Office Monthly Income Schemes can be great options for you.

Subsequently, calculators like the monthly payout FD calculators and monthly income scheme calculators can be a godsend. You can compare and analyse various investment options through such tools. This can help you make a sound and informed decision about parking your funds in the right space and for the right interest payout.