Post Office MIS for retirees: ₹617 a month per lakh

What each lakh pays

The Post Office Monthly Income Scheme (POMIS, or MIS) does one thing. You deposit a lump sum, the post office pays interest into your account every month for five years, and then it returns the deposit. Nothing compounds. For the October–December quarter of FY 2026-27 the rate is 7.4% a year, and the rate you open at is fixed for the full five years.

So each ₹1 lakh pays ₹7,400 a year, or ₹616.67 a month. The Post Office MIS calculator does this for any amount up to the limit.

For most retirees the comparison is with the Senior Citizen Savings Scheme, which pays 8.2% for the same quarter, quarterly rather than monthly. Side by side:

The joint MIS limit is shared: each holder's portion counts against their own ₹9 lakh, across single and joint accounts together. A couple can therefore hold ₹18 lakh in MIS between them at most, paying ₹11,100 a month.

Why take the lower rate at all

On every lakh, SCSS pays ₹800 a year more. On ₹9 lakh that is ₹7,200 a year. So a retiree aged 60 or more with less than ₹30 lakh to place gets more income from SCSS alone, and the SCSS calculator is the first stop.

MIS earns its place in three situations:

1. Money above the SCSS limit. Once ₹30 lakh is in SCSS, MIS is the next guaranteed income scheme at the counter.
2. A spouse who does not yet qualify for SCSS. MIS has no age condition, so a wife or husband under 60 can hold it in their own name.
3. Cash in every month. SCSS pays four times a year. MIS pays twelve times, which suits a household budget that runs monthly.

A retired couple, worked through

Take a husband of 61, retired, and a wife of 57 who has not worked outside the home, with ₹48 lakh set aside for a guaranteed income floor. Only he qualifies for SCSS for now.

That is ₹3,79,200 a year before tax. In practice the household receives ₹11,100 every month from MIS, plus ₹61,500 in each SCSS quarter. When the wife turns 60 she can open her own SCSS account with up to ₹30 lakh, so the couple's guaranteed capacity is far larger than one person's.

Tax. The husband's interest is ₹3,12,600 a year (₹2,46,000 from SCSS and ₹66,600 from MIS); the wife's is ₹66,600. Both are taxed at slab. Under the new regime, a total income up to ₹12 lakh is covered by the rebate, so a modest pension on top may still leave no tax to pay. SCSS deducts TDS once a year's interest crosses ₹1 lakh, which his ₹2,46,000 does. If his estimated tax for the year is nil, a declaration to the post office stops the deduction; since 1 April 2026 that is Form 121, which replaced Form 15H, as our post on TDS and Form 121 explains. MIS deducts no TDS, so any tax due on it is paid through advance tax or at filing.

Whose money it is matters. If the wife's ₹9 lakh came to her as a gift from her husband, the interest on it is taxed in his hands, not hers. Clubbing of income explains the rule. Splitting deposits between spouses spreads income only when each spouse's money is genuinely their own.

The four things to watch

Unclaimed interest earns nothing. MIS interest left lying in the scheme earns no further interest. Have it credited to a post office savings account, or set a standing instruction into a post office recurring deposit; the RD calculator shows what that builds over five years.

The income is fixed; prices are not. ₹5,550 a month stays ₹5,550 for five years. If prices rise 5% a year, an assumption rather than a forecast, it buys what ₹4,349 buys today by year five. The inflation calculator runs your own rate, and inflation and your savings explains why a 30-year retirement cannot rest on fixed payouts alone.

Renewal comes at whatever rate is on offer then. MIS cannot be extended. At maturity you take the money back and reinvest at the rate in force. SCSS can be extended once by three years, at the rate prevailing when the extension starts.

Breaking early costs money. MIS cannot be closed in its first year. Between one and three years the penalty is 2% of the deposit, or ₹18,000 on ₹9 lakh; between three and five years it is 1%, or ₹9,000. The monthly interest already received is kept.

Where the rest of the corpus goes

SCSS and MIS together make a floor, not a whole plan. Above it, retirees usually keep a few years of spending in short-term debt funds such as money market funds, drawn by a systematic withdrawal plan, and leave the long-term remainder in equity. Our three-bucket retirement strategy lays out that structure, SCSS vs mutual funds for retirement income compares the after-tax cash flow, and which pot to draw first covers the order. The full family of schemes is in our small savings guide.

Rates are notified each quarter by the Ministry of Finance; check the current figures on India Post before you open an account. This post is for education and is not a recommendation.