Post Office MIS Scheme 2026: Invest ₹5 Lakh and Earn ₹3,083 Monthly, Check 5-Year Returns and Interest Rate

Post Office Monthly Income Scheme 2026: If you have accumulated savings and want to generate a regular monthly income without investing in the stock market, the Post Office Monthly Income Scheme (POMIS) could be worth considering.

This government-backed small-savings scheme allows eligible individuals to deposit a lump sum and receive interest every month. Unlike market-linked investments, the scheme follows an interest rate notified by the government.

According to the October 20, 2026 report, the Post Office MIS interest rate for the October–December 2026 quarter is 7.4% per annum.

At this rate, an investment of ₹5 lakh can generate approximately ₹3,083 in monthly interest. Over five years, the total interest income would amount to ₹1.85 lakh, while the original ₹5 lakh deposit would be returned at maturity, subject to the scheme's rules.

The scheme also allows investments of up to ₹9 lakh in a single account and ₹15 lakh in a joint account.

Here is a detailed explanation of the interest calculation, investment limits, maturity benefits, tax rules and withdrawal conditions.

What Is the Post Office Monthly Income Scheme?

The Post Office Monthly Income Scheme is a government-backed savings product designed to provide regular interest income.

Under the scheme, an eligible investor deposits a lump sum when opening the account.

Interest is then paid monthly according to the applicable scheme rules.

The account has a maturity period of five years.

At maturity, the investor receives the principal amount back.

This arrangement can be useful for people who want predictable monthly cash flow from their savings.

However, the scheme is not designed to generate high market-linked growth. Its primary purpose is to provide regular income while preserving the deposited principal under the government's small-savings framework.

Post Office MIS 2026: Key Features

The interest rate applicable to a newly opened account is determined under the government's notified small-savings rates. Future rates for new accounts may change.

How Much Monthly Income Will ₹5 Lakh Generate?

Suppose an investor deposits ₹5,00,000 in a Post Office MIS account at an annual interest rate of 7.4%.

The yearly interest can be calculated by multiplying the principal by the annual rate.

Annual interest = ₹5,00,000 × 7.4% = ₹37,000

Since interest is paid monthly, the annual interest is divided by 12.

Monthly interest = ₹37,000 ÷ 12 = ₹3,083.33

Therefore, an investment of ₹5 lakh can provide approximately ₹3,083 per month.

Post Office MIS ₹5 Lakh Calculator

The ₹6.85 lakh figure represents the combined value of interest received over five years and the principal returned at maturity.

It does not mean that ₹6.85 lakh will be paid as one lump sum at the end of five years.

The interest is distributed monthly, while the principal is repaid at maturity.

How Does the Five-Year MIS Calculation Work?

The Monthly Income Scheme does not automatically reinvest the monthly interest into the same deposit.

Instead, the interest is paid out to the account holder.

For a ₹5 lakh deposit, the approximate annual interest is ₹37,000.

Over five years, the total interest would be:

₹37,000 × 5 = ₹1,85,000.

The original deposit of ₹5 lakh remains separate from the monthly interest payments.

At the end of the five-year term, the principal is returned according to the applicable rules.

This is an important difference between a monthly income product and a cumulative fixed deposit, where interest may be reinvested and compounded.

How Much Can You Earn From a ₹9 Lakh Single Account?

The Post Office MIS permits a maximum investment of ₹9 lakh in a single account, subject to the applicable overall deposit limits.

At an annual interest rate of 7.4%, a ₹9 lakh deposit generates ₹66,600 in annual interest.

Dividing this amount by 12 gives a monthly interest payment of ₹5,550.

₹9 Lakh MIS Return Calculation

An eligible investor depositing ₹9 lakh could therefore receive ₹5,550 each month at the stated rate.

The original ₹9 lakh would be returned after five years, provided the account is maintained until maturity.

How Much Monthly Income Will ₹15 Lakh Generate?

The scheme also allows joint accounts with a maximum deposit of ₹15 lakh.

At an annual interest rate of 7.4%, this amount generates ₹1,11,000 in yearly interest.

That translates into ₹9,250 per month.

₹15 Lakh Joint MIS Calculator

The joint-account limit applies to the account as a whole, not separately to each holder.

Investors must also comply with the scheme's rules concerning their share of deposits across single and joint accounts.

Post Office MIS Monthly Income Comparison

Here is a comparison of how much monthly interest different deposit amounts can generate at 7.4%.

The ₹15 lakh investment is available only under the applicable joint-account arrangement.

All calculations assume the quoted 7.4% annual rate and that the account remains open for the full five-year term.

Who Can Open a Post Office MIS Account?

The Post Office Monthly Income Scheme is available to eligible individuals under the government's small-savings rules.

An adult can generally open a single account.

A joint account can be opened by eligible adults, subject to the permitted number of account holders.

Accounts may also be opened for minors through guardians under the applicable provisions.

Investors must complete the required identity verification and documentation procedures.

The scheme is not restricted to senior citizens.

Working professionals, retirees and other eligible savers may consider it depending on their financial needs.

Is Post Office MIS Suitable for Senior Citizens?

Retired individuals often look for savings products that provide predictable cash flow.

The Monthly Income Scheme can be useful for this purpose because interest is paid regularly.

For example, a ₹9 lakh deposit can generate ₹5,550 per month at the quoted rate.

However, the scheme should not automatically be considered the most suitable option for every retiree.

Investors should compare it with other government-backed savings products, bank deposits and their broader retirement income requirements.

Inflation is another important consideration.

Although the nominal monthly interest may remain predictable for the account's term, its purchasing power can decline over time as living expenses rise.

Is the Post Office MIS Interest Tax-Free?

No. Interest earned from the Post Office Monthly Income Scheme is generally taxable.

It is normally included in the investor's taxable income according to the applicable income tax rules.

The actual tax liability depends on factors such as total income, applicable deductions, exemptions and the chosen tax regime.

For example, two investors receiving the same monthly MIS interest may have different overall tax liabilities because their income circumstances differ.

Investors should also distinguish between the return of principal and interest income.

The repayment of the original deposit is not the same as earning taxable interest.

Tax treatment should be checked under the rules applicable to the relevant financial year.

Can You Withdraw MIS Money Before Five Years?

The Post Office Monthly Income Scheme has a five-year maturity period.

However, premature closure is permitted under specified conditions.

Under the commonly applicable MIS rules, premature closure is generally not allowed before one year from the date of deposit.

If an account is closed after one year but before three years, a deduction of 2% of the principal may apply.

If it is closed after three years but before five years, a deduction of 1% of the principal may apply.

Premature Closure Rules

These conditions make it important to invest only money that can remain committed for the required period.

How to Open a Post Office MIS Account

Eligible individuals can apply for a Monthly Income Scheme account through an authorised post office.

The general process involves selecting the appropriate account type and completing the required application.

Applicants must provide the identity and address documents required under the applicable KYC rules.

They must also provide nominee information and other account details as required.

After depositing the eligible lump-sum amount and completing the necessary formalities, the account can be opened.

Investors should confirm the applicable interest rate and payment arrangements before making the deposit.

Post Office MIS vs Bank Fixed Deposit

Both Post Office MIS and bank fixed deposits can provide relatively predictable income, but their structures differ.

The Post Office MIS is a government-backed small-savings scheme with a five-year term and monthly interest payments.

Bank fixed deposits may offer different maturity periods, interest rates and payout choices.

Some bank deposits offer cumulative interest options, while others permit monthly or quarterly payouts.

The level and structure of deposit protection also differ.

Investors should compare liquidity, taxation, interest rates and the applicable terms before choosing between the products.

Important Things to Remember Before Investing

The Post Office MIS is designed for income generation rather than aggressive capital growth.

Investors should consider whether the monthly interest is sufficient for their needs.

They should also keep emergency savings available outside the scheme because premature closure can involve restrictions and deductions.

The interest rate for a new deposit is determined under the applicable government notification, so investors should verify the current rate when opening an account.

It is also important to remember that the scheme's investment limits apply across eligible holdings according to its rules.

Post Office MIS 2026: Final Update

At the reported October–December 2026 interest rate of 7.4%, a ₹5 lakh investment in the Post Office Monthly Income Scheme can generate approximately ₹3,083 every month.

Over five years, the total interest would amount to ₹1.85 lakh, with the original ₹5 lakh returned at maturity.

A ₹9 lakh single-account deposit could generate ₹5,550 per month, while a ₹15 lakh joint-account deposit could provide ₹9,250 monthly.

For investors seeking regular income from a government-backed savings product, Post Office MIS may be worth evaluating. However, the interest is taxable, premature withdrawals are subject to conditions, and the deposited amount remains committed for the scheme's five-year term.

Disclaimer: This article is for general financial information only. Calculations are based on the reported 7.4% interest rate and assume a full five-year investment period. Verify the latest official scheme rules and interest rates before investing.