Post Office Monthly Income Account (POMIS) is a government-backed short-term investment scheme that provides guaranteed monthly interest income. The scheme allows a one-time lump sum investment of up to 15 lakh in a joint account for a period of five years.

Given the attractive interest rates in a POMIS account, it can be an option for senior citizens to consider for post-retirement cash flows.

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Here are some key features of the scheme.

Eligibility: Any Indian individual above the age of 10 years can open the Post Office Monthly Income Account (POMIS). However, it is not available for non-resident Indians (NRIs). For a minor, exit from the scheme is permitted only after 18 years. Also, the POMIS scheme has no maximum age limit, so it is open to senior citizens.

Transferable: The POMIS account is transferable within India. It means you can easily transfer the account to your nearest post office if you change your residential address, making it super convenient for senior citizens who may prefer post office services closer to their homes after retirement.

Joint Account: The POMIS scheme has distinct features for an individual and a joint account. For instance, the maximum investment amount in an individual account is Rs 9 lakh. On the other hand, in a joint account, where up to three people are allowed, the maximum limit is Rs 15 lakh. However, in both accounts, people can choose any amount to invest, provided it doesn’t exceed the maximum prescribed limit.

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Joint accounts can be with the spouse, children, or both. Each investor holds equal rights to the account. If you have multiple accounts in different post offices, the total investments should not exceed Rs 9 lakh. For joint accounts, it is up to Rs 15 lakh.

Returns: The Post Office Monthly Income Account (POMIS) provides an annual interest of 7.40 per cent, credited monthly to the account. This monthly interest income can help address senior citizens’ cash flow needs post-retirement and can be an additional pension income.

Premature Closure: The POMIS scheme has a five-year lock-in; hence, a premature withdrawal will attract a penalty. The fine is applied based on the time left for maturity.

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Documents Required: To open a POMIS account, the individual must have an Aadhar card and a PAN card, and for identity and address proof, a driving license, passport, voter ID card, electricity, gas or water bills, and a passport-sized photograph.