Does MIS interest compound?

No. Interest is paid out monthly; the scheme is designed for income, not compounding.

What is the MIS maximum investment?

Currently ₹9 lakh for a single account and ₹15 lakh for a joint account (subject to change).

Is MIS interest taxable?

Yes. Entire monthly interest is taxable as income from other sources.

Can I break MIS early?

Yes after 1 year with penalty; rules differ before and after 3 years.

Post Office Monthly Income Scheme (POMIS) Optimization Framework

Engineer monthly income optimization, systematic yearly payout maximization & advanced 5-year MIS return computational protocols.

Post Office Monthly Income Scheme (MIS) Optimization Framework – Advanced Architecture

The Post Office Monthly Income Scheme represents a sophisticated 5-year government-backed optimization framework that transforms lump-sum capital deposits into predictable monthly income optimization streams. This advanced architecture features capital preservation with systematic interest withdrawal protocols (non-compounding optimization).

Key Features

Tenure: 5 years (option to reinvest on maturity).
Income Frequency: Monthly interest credited / withdrawable.
Investment Limits: Single: ₹9 lakh; Joint (up to 3): ₹15 lakh (as per latest revision).
Safety: Sovereign backing via Government of India.

How Monthly Interest is Calculated

Monthly Interest = Principal × (Annual Rate ÷ 12)
Effective annual yield equals the nominal rate because payouts are withdrawn, not reinvested.

MIS vs SCSS vs Bank FD

Feature	MIS	SCSS	Bank FD (Monthly)
Eligibility	All residents	Seniors (60+) / others on conditions	All (bank KYC)
Payout Frequency	Monthly	Quarterly	Monthly
Tax Benefit	None	80C (principal)	None (usually)
Premature Rules	Penalty based on time elapsed	Interest recovery + penalty slabs	Bank-specific penalty

Premature Closure

Not allowed within first 1 year (except death).
After 1 year and before 3 years: small interest penalty.
After 3 years: lower penalty (refer latest notification).

Taxation

No Section 80C benefit on deposit.
Monthly interest fully taxable (add to income).
No TDS by Post Office presently — self declare.

Suitability

Retirees seeking predictable monthly cash flow.
Investors building a ladder of safe income sources.
Parking recent lump sum before phased deployment elsewhere.

Strategy Ideas

Stagger MIS accounts across months to spread credit dates.
Pair with SCSS (for seniors) to diversify payout frequency.
Channel monthly interest into SIPs for growth allocation.

FAQs

Does MIS compound? No, interest is meant to be withdrawn monthly. If left idle it is not automatically reinvested at MIS rate.

Can I add top-ups to an existing MIS? No, you must open a new account for additional investment.

What happens at maturity? Principal can be withdrawn or reinvested (open a new MIS / move to other scheme).

Is interest guaranteed? Yes for the 5-year term on your account (rate locked at opening).

More calculators: SCSS Calculator, KVP Calculator, NSC Calculator.

Post Office Monthly Income Scheme Optimization Framework