POMIS: How to open Post Office MIS account offering 7.4% returns? A step-by-step guide

livemint.com:

Capital protection and Low-risk investment: Being a sovereign guaranteed scheme, your capital is safe until maturity and also the investment is not subject to market risks. Affordable deposit amount: As per your affordability, you can open a Post Office MIS account at a nominal investment of Rs.1,000 and in multiple of ₹1,000. The maximum investment limit in a Post Office MIS account is ₹9 lakhs in a single account, for joint accounts the maximum deposit limit is enhanced to ₹15 lakhs.

Maturity period: The maximum lock-in period for a Post Office MIS account is 5 years. The investor can withdraw the invested amount after the scheme is matured or reinvest the corpus. Pre-mature closure: As per the scheme norms, the investor can not withdraw the deposit before the expiry of 1 year from the date of deposit.

In case, the investor withdraws the investment amount before the expiry of the lock-in period, a penalty is charged. If the account is closed before three years from the date of account opening, 2% of the amount is deducted from the principal and 1% from the principal if closed before 5 years. Tax-efficiency: TDS does not apply to the interest generated every month, however, the investment is not covered under Section 80C.

Guaranteed returns: The interest is generated every month and returns are not inflation-beating. Transferability: In case, you are changing your residential status, you can transfer your POMIS account to another post office anywhere in India Nominee: As per the scheme norms, the investor can nominate a beneficiary so that he/she can claim the benefits and the corpus after his/her demise. It is important to note that a nominee can be assigned even after opening an account.