Enter your deposit amount. See the exact monthly income that lands in your account on the 1st of every month for five years.
The appeal of MIS is its simplicity: you deposit money at the post office, and on the 1st of every month for five years, a fixed amount arrives in your bank account. No market tracking, no reinvestment decisions, no surprises. This Post Office MIS calculator tells you exactly how much that monthly amount will be, the annual income, and the total interest you collect over the five years before your principal comes back.
MIS is built for one purpose: guaranteed monthly cash flow. You park a lump sum at the post office, and 7.4% of it per year is divided into twelve equal payments and credited to your account every month. The principal sits untouched throughout the five years and is returned in full at maturity. No part of the interest is reinvested and no compounding happens. The calculation is straightforward simple interest on a monthly payout schedule. What makes MIS worth considering is the combination of government backing, no credit risk, a rate that beats most bank savings and FD offerings on a monthly-payout basis, and a deposit limit of Rs.9 lakh per person that works well for anyone deploying a moderate retirement corpus.
A few things worth knowing before you walk into the post office:
MIS uses simple interest, not compound interest. The annual rate is divided by 12 and applied to the principal each month:
Formula:
Monthly Income = (Principal × Annual Rate) / 12
What each part means:
Three practical examples at different deposit levels:
Rs.1 lakh deposit at 7.4%:
Rs.5 lakh deposit at 7.4%:
Rs.9 lakh deposit at 7.4% (maximum for single account):
Key points about how MIS works:
For FY 2024-25 the rate is 7.4% per annum. The government reviews small savings rates quarterly, but the rate you get when you open the account is frozen for the full five years. If the rate rises next quarter, your account stays at 7.4%. If it falls, you still get 7.4%. That rate lock is one of the reasons to open MIS when rates are at a relatively high point rather than waiting.
The minimum is Rs.1,000 in multiples of Rs.1,000. The maximum per person in a single-name account is Rs.9 lakh. In a joint account, the ceiling rises to Rs.15 lakh split between the two holders. You open multiple MIS accounts, but the post office tracks your total across all accounts and will not allow you to exceed the per-person limit. NRIs are not eligible. Someone who has reached the Rs.9 lakh ceiling and wants more MIS exposure opens a joint account with a spouse to access an additional allocation.
No Section 80C deduction on MIS. The monthly interest is taxed as income from other sources at your applicable slab rate. The post office does not deduct TDS. That means the monthly payment arrives gross, and you are responsible for reporting it in your ITR and paying advance tax or self-assessment tax accordingly. For someone in the nil or 5% tax bracket, the effective post-tax yield at 7.4% gross is still attractive. For someone in the 30% bracket, the post-tax yield drops to about 5.18%, which is less compelling. The Senior Citizens Savings Scheme offers 8.2% with TDS and a higher limit; for high-bracket earners, SCSS is usually the better choice.
Exiting before five years is possible but not free. Close after 1 year and before 3 years and you lose 2% of the principal as a penalty. Close after 3 years and the penalty drops to 1%. Closing within the first year is not allowed at all except for the account holder's death or a court order. On a Rs.5 lakh deposit, a 2% penalty costs Rs.10,000. Weigh that against whatever urgency is driving the premature closure. In many cases, a short-term personal loan is cheaper than the penalty, especially if you are in year 2 or early year 3.
The monthly interest credits to your account on the 1st of every month. If the 1st falls on a Sunday or a bank holiday, the credit happens on the next working day. The first payment arrives exactly one month after the account opening date. You link a savings account at the post office or a bank account for auto-credit, which is the most practical setup. The alternative is collecting in cash at the post office counter or receiving a monthly cheque, both of which are inconvenient for most people. Auto-credit to a bank account is what most depositors use.
When the five years are up, the income payments stop and your principal is returned. MIS does not auto-renew. The post office holds your principal after maturity until you go in and claim it. If you forget for months, the principal sits there earning nothing. Take your passbook to the post office, submit the account closure form, and the principal is credited back. If you want to continue earning monthly income, open a fresh MIS account. Many investors plan this 1 to 2 months in advance so there is no gap in income between the old account closing and the new one starting.
MIS at 7.4% with monthly payouts beats most bank monthly-income FDs on rate, carries no credit risk beyond the government guarantee, and does not deduct TDS. Bank FDs are more flexible: no hard deposit ceiling, multiple tenure options, and a loan facility against the FD if you need liquidity. For someone needing Rs.5,000 to Rs.10,000 per month in guaranteed retirement income on a Rs.8 to 9 lakh corpus, MIS is the cleaner choice. For someone with more than Rs.9 lakh to deploy or who needs a shorter tenure than five years, a bank FD is more practical. The tax treatment is identical: interest is taxable as income from other sources under both.
Walk into any post office with your PAN card, Aadhaar, a passport-size photograph, and the deposit amount in cash, cheque, or DD. Fill the account opening form on the spot, nominate a family member, and submit. Your passbook is ready in 2 to 3 working days. Online account opening is not available for MIS as of mid-2025. Transfers between post offices are free of charge and handled through a simple request form, which is useful if you relocate after opening the account.
Senior citizens invest in MIS at the same 7.4% as everyone else. There is no premium rate for age. Before choosing MIS, seniors should check the Post Office Senior Citizens Savings Scheme, which offers 8.2% with quarterly payouts and a limit of Rs.30 lakh per person. The SCSS rate is 0.8% higher and the deposit ceiling is more than three times larger. The only reason to pick MIS over SCSS for a senior citizen is if you specifically need monthly payouts rather than quarterly, or if you have already used up your Rs.30 lakh SCSS limit. For most seniors, SCSS should come before MIS.
When the account holder dies before the five years are complete, the account is treated as matured on the date of death. The nominee gets the full principal back plus the proportionate interest up to the date of death, without any premature closure penalty. The nominee submits the account holder's death certificate, a claim form, and the original passbook at the post office. Processing takes 30 to 45 days at most offices. Keep the nomination current. An outdated nomination forces the family into a legal succession process that is significantly slower and more paperwork-intensive.
The post office does not offer a loan directly against an MIS account. Some banks and NBFCs accept the MIS passbook as collateral for a secured loan, but this is at their discretion and the loan rate will be higher than the 7.4% the MIS is earning. If you need emergency liquidity, the realistic options are: premature closure with the applicable penalty, or a personal loan if the urgency is short-term. If the penalty is 2% on Rs.5 lakh (Rs.10,000) and you need the money for 60 days, a personal loan at 12% annually costs about Rs.10,000 in interest. The penalty and the loan cost are roughly equal at that tenure, so the comparison is worth doing before deciding.
