New Delhi: Post Office schemes offer an excellent opportunity for people to earn money. If you are considering an investment where your capital remains safe and yields future returns, you might have heard of the Post Office Monthly Income Scheme (MIS). If you wish to join such a scheme, MIS is a great option. A single investment in this scheme generates monthly income in the form of interest.
If you have ₹2 lakh, you can earn a regular monthly income through the interest accrued. If you are thinking of building wealth through the Post Office Monthly Income Scheme, do not delay. Here are the details of the scheme.
How to invest ₹2 lakh?
You can deposit a lump sum amount into the Post Office Monthly Income Scheme. An account can be opened with a minimum deposit of ₹1,000. The scheme allows for a maximum deposit of ₹9 lakh in a single account and ₹15 lakh in a joint account. Therefore, an investment of ₹2 lakh falls well within these limits.
The interest rate for the scheme is determined by the government, and payouts are made monthly. You have the option to receive the interest payment in your Post Office savings account or a bank account. If you deposit ₹2 lakh and the annual interest rate is 7.4%, you can easily earn approximately ₹14,800 in interest per year.
This translates to a monthly interest income of approximately ₹1,233. Over the full five-year tenure, assuming the interest rate remains at 7.4%, the total interest earned would be around ₹74,000. Additionally, the principal amount of ₹2 lakh is returned upon maturity.
Know the scheme’s tenure.
The tenure of the Monthly Income Scheme is five years. During the tenure, interest on the invested amount is paid out monthly. Upon maturity, the principal amount is refunded. Thus, this scheme can be beneficial for individuals seeking regular income.
Withdrawal after one year
The Post Office Monthly Income Scheme (MIS) is a highly attractive option. If you need funds due to unforeseen circumstances, the account can be closed prematurely after one year. As per the scheme’s rules, the investment amount will be refunded after a deduction.
Key points to consider before investing
The interest rate offered under the MIS is subject to periodic revision; therefore, it is important to check the applicable rate at the time of investment. Additionally, one should understand the tax implications on the interest earned, the investment tenure, and the rules regarding premature withdrawal. Before investing a sum like ₹2 lakh, assess your monthly income requirements and consider whether you can keep the funds invested in the scheme for the full five-year term.
Understand the essentials before investing.
Interest rates under the Monthly Income Scheme are subject to change; hence, it is advisable to verify the prevailing rate when investing. It is also essential to understand the tax implications on the interest, the investment tenure, and the rules governing premature withdrawal.
