The Post Office Monthly Income Scheme (MIS) pays you guaranteed interest every month on a lump sum for 5 years, then returns the full amount. It's popular with retirees and anyone wanting a steady, safe income.
MIS rules and formula
| Rule | Details |
|---|---|
| Interest rate | 7.4% a year, paid monthly (October – December 2026) |
| Maximum deposit | ₹9 lakh single account, ₹15 lakh joint |
| Term | 5 years |
| Early closure | After 1 year, with a deduction of 2% (before 3 years) or 1% (after) |
Monthly income = deposit × rate ÷ 12 ÷ 100Worked example
Example: ₹9 lakh in a single account
Monthly income: ₹5,550, or ₹3.33 lakh over 5 years, with the ₹9 lakh returned at the end.
A joint account with the maximum ₹15 lakh pays ₹9,250 a month.
Tax and alternatives
MIS interest is fully taxable at your slab rate, though no TDS is deducted. There's no 80C benefit. For people over 60, the Senior Citizens' Savings Scheme usually pays a higher rate. If you don't need monthly income, reinvesting the payout through a post office RD earns more. Compare with an FD.
How to use this calculator
- Enter the deposit amount.
- Choose a single or joint account.
FAQs
Is the rate fixed?
Yes, the rate when you open the account applies for the full 5 years.
Sources
- Angel One: small savings rates for October–December 2026
- Indian Bank: Government memorandum on small savings rates, Q3 FY 2026-27
Results are estimates for resident individuals under 60 and aren't tax, legal or financial advice. For your own return, check with a chartered accountant. Spotted a mistake? Tell us.