A monthly income for retired parents
Meena-ben’s father retired last year from a private job in Rajkot. There is no pension, only savings, and he wants a fixed amount every month for groceries and medicines. That is what the Post Office Monthly Income Scheme is for. You deposit a lump sum, it stays for 5 years, and the interest is paid to you every month.
With ₹9 lakh in a single account at 7.4%, he gets ₹5,550 a month, or ₹66,600 a year. If he and Meena-ben’s mother open a joint account with ₹15 lakh, it goes up to ₹9,250 a month. After 5 years the full deposit comes back.
How the monthly amount is worked out
MIS pays simple interest. Nothing is added back to the deposit, so the payout is the same every month for all 60 months:
Monthly income = deposit × rate ÷ 12 ÷ 100
The rate on the day you open the account stays for the full 5 years. The interest is taxed at the holder’s slab rate. If your parents are 60 or more, also check the SCSS calculator, which pays 8.2% but every quarter.
For a housewife’s savings
Many homemakers have money put aside over the years, kept as cash at home or lying in a savings account. ₹5 lakh in MIS in her own name pays about ₹3,083 a month. It comes to her every month, on time, and the ₹5 lakh is back in her hands after 5 years. If the money came from her husband, the interest is usually taxed as his income.
Don’t need it every month? Put it in an RD
MIS interest does not compound. If the ₹5,550 isn’t needed for expenses, start a 5-year Post Office RD for the same amount. At the RD rate of 6.7%, those 60 instalments grow to about ₹3,96,080. That is about ₹63,080 more than the ₹3,33,000 of MIS interest on its own.
Post Office MIS rules
| Interest rate | 7.4% a year (October to December 2026), reviewed every quarter, fixed for your 5 years |
|---|---|
| Deposit | ₹1,000 to ₹9 lakh in a single account, up to ₹15 lakh in a joint account (up to 3 adults) |
| Tenure | 5 years, deposit returned at maturity |
| Payout | Interest every month |
| Early closure | Not in year 1. 2% of the deposit is cut in years 2 to 3, 1% after that |
| Tax | Interest taxed at the holder’s slab rate |
Frequently asked questions
What is the Post Office MIS interest rate now?
7.4% a year for October to December 2026. The government reviews small savings rates every quarter, but the rate on the day you open the account stays the same for all 5 years.
How much monthly income will ₹9 lakh give in MIS?
At 7.4%, ₹9 lakh in a single account pays ₹5,550 every month, or ₹66,600 a year. Over 5 years that is ₹3,33,000 of interest, and the ₹9 lakh comes back at maturity.
What is the maximum limit in Post Office MIS?
₹9 lakh in a single account and ₹15 lakh in a joint account, which can have up to 3 adults. The minimum is ₹1,000. A full ₹15 lakh joint account pays ₹9,250 a month at 7.4%.
Can I close Post Office MIS before 5 years?
Not in the first year. If you close it in years 2 to 3, 2% of the deposit is cut. After that the cut is 1%. So keep money you may need soon somewhere else.
Is Post Office MIS interest taxable?
Yes. The monthly interest is added to the account holder’s income and taxed at their slab rate. It also does not compound on its own, so many people move it into a Post Office RD every month.
Calculator maintained by Manoj. Last reviewed: 19-10-2026. Rates and rules are checked against official sources. Tell us if something has changed. Contact
