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“We don't tell what to pick, we tell how to pick”

Post Office Monthly Income Scheme (POMIS)

Simulate guaranteed monthly payouts under the POMIS scheme and evaluate the erosion of your monthly income and principal.

💡 Motto: We don't tell what to pick, we tell how to pick.

Investment Settings

Total Deposit
₹
₹1,000 (Min)₹9 Lakhs (Max)
POMIS Interest Rate

7.4% p.a.

*Paid out monthly. Fixed for 5 yrs.
Tenure Lock-in

5 Years

*Returned at maturity.
Expected Inflation Rate
%
Monthly Interest Income

₹2,775

Paid directly to bank account
Total Nominal Interest

₹1,66,500

Over 5 years: ₹4,50,000 returned
Real Value of Returned Principal

₹3,51,080

Lost ₹98,920 in purchasing power
⚠️ Double Inflation Erosion:POMIS pays a fixed nominal income of ₹2,775/month. By Year 5, this payout purchases only what ₹2,165 does today. In addition, the returned principal of ₹4,50,000 has eroded by ₹98,920 in real value.

Erosion of Monthly Income (Purchasing Power)

POMIS Rules & Income Security

Statutory Limits & Payout Structure

The Post Office Monthly Income Scheme (POMIS) is a government savings program that offers low-risk regular monthly income.

  • Limits: The maximum investment is capped at ₹9,00,000 for single accounts and ₹15,00,000 for joint accounts.
  • Premature Withdrawal Penalty: Lock-in period is 5 years. If closed between 1-3 years, a 2% deduction applies. If closed between 3-5 years, a 1% deduction applies to the principal.
  • Taxation: Interest income is completely taxable under "Income from Other Sources" at your tax slab rate. There is no tax benefit under Section 80C.

The Regular Payout Inflation Dilemma

Many retirees depend on POMIS for monthly income because it is safe and regular. However, POMIS suffers from two structural flaws:

1. Flat Income: The monthly payout is flat and does not grow. In 5 years, general prices will rise by ~28% (at 5% inflation), meaning your monthly ₹5,550 payout will buy only what ₹4,300 does today.

2. Principal Decay: When the government returns your principal of ₹9 Lakhs at Year 5, it is nominal. Its actual purchasing power will have decayed to approximately ₹7 Lakhs today. Retaining capital entirely in POMIS results in a guaranteed loss of real purchasing power.