Search in Indianmoney's WealthPedia

Home Articles Comparison Between Post Office RD and Monthly Income Scheme

Comparison Between Post Office RD and Monthly Income Scheme Research Team | Posted On Monday, March 02,2020, 05:36 PM

5.0 / 5 based on 2 User Reviews

Comparison Between Post Office RD and Monthly Income Scheme



Saving money and investing for the future is an important aspect of setting up the most optimal financial plans. With high living standards and growing demands, people have become more aware on financing family's needs and save money before it gets spent. People have to save and invest to secure their financial future.

While the choice of investments largely depends on the investor's risk profile, most investors prefer having some percentage of their investment in fixed return assets. As the banking system has not yet reached out to each Indian, the post office serves the purpose. It is one of the most trusted financial institutions, especially in rural India. The post office offers several saving schemes to Indian investors like PO Fixed Deposit, time deposit, recurring deposit, monthly income scheme, Sukanya Samriddhi Yojana and so on, while post office RD is the most availed scheme. The monthly income scheme is very well popular among the rural customers. The returns offered on these schemes are also quite competitive and attract a major customer base.

Want to know more on Investment Planning? We at will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

See Also: Post Office Recurring Deposit Account

Comparison Between Post Office RD and Monthly Income Scheme

Here is a comparison between the Post Office Recurring Deposit and Monthly Income Scheme:





RD is a risk-free investment that comes with assured returns

A monthly income scheme is also a risk free investment that provides investors with assured returns at a predetermined rate of interest.

Maturity period

RD is available in different maturity periods; 1 year, 2 years, 3 years, 5 years.

There is a 5 years lock-in period on the post office monthly income scheme

Minimum investment

The initial minimum investment is Rs. 10. The deposit amount should be in multiples of Rs 5.


The initial minimum payment is Rs 1,500. You can, later on, add to the initial amount as per your choice.

Maximum permissible investment

There is no cap on the upper limit.

The payment can be made in cash or cheque. The RD account can be transferred from one post office to another.

There is a cap on the maximum permissible investment in your POMIS account i.e. Rs. 4.5 Lakhs. You can transfer your POMIS account from one post office to another.

Multiple account opening

Investors can open multiple RDs at the post office.

You can open multiple accounts under the monthly savings scheme. The maximum cap however still holds true. The total combined investment per person across all accounts cannot exceed Rs 4.5 Lakhs.

Joint ownership

You can open post office RD in joint ownership. However, only two people can open a joint RD account.

You can open a POMIS account in joint ownership with 2 or 3 people. Regardless of who is depositing the money, all the joint owners exercise equal rights over the account. The maximum investment cap on the joint account is Rs 9 Lakhs

Early or partial withdrawal

Single partial withdrawal is allowed up to 50% of the deposit amount on completion of a year.

In case of early withdrawal, a penalty is levied on the depositor. The penalty criteria are:

1.    If the withdrawal is made within 1 year of investment, no benefits are shared with the investor.

2.    If the withdrawal is made between 1 to 3 years of investment, the total deposit amount is given back to the customer with a 2% deduction as a penalty.

3.    If the withdrawal is made after 3 years of investment, the total deposit amount is given back to the customer with a 1% deduction as a penalty.

Rate of interest

The post office RD offers an interest rate of 6.9% at present.

POMIS provides a return of 7.3% at present.


For earnings above Rs. 10,000, 10% TDS is applicable.

TDS is not levied on the POMIS earnings. However, the scheme does not qualify for Section 80C deductions


The post office RD can be renewed on completion of 5 years for the next 5 years on year to year basis.

You can renew your POMIS account for the next five years as well.

Minor eligibility

The post office RD can be opened in the name of minors who have attained the age of 10 years.

The post office monthly income scheme can be opened in the name of minors who have attained the age of 10 years.

Both POMIS and Post Office RD are excellent ways of saving money and ensuring reasonable appreciation over the investment horizon. Depending on cash flow you can choose to invest in either or both of them for better returns. An add-on has been added to the POMIS, to shift the profits to an RD account for better returns.

See Also: Post Office Recurring Deposit Scheme Interest Rates 2020

You May Also Watch

Iframe Content

Keep your Financial Cognizance up to date with IndianMoney App. Download NOW for simple tips & solutions for your financial wellbeing.

Have a complaint against any company?'s complaint portal can help you resolve the issue. Just visit and lodge your complaint. If you want to post a review on any company you can post it on review and complaint portal

Be Wise, Get Rich.

What is your Credit Score? Get FREE Credit Score in 1 Minute!

Get Start Now!
Get It now!

This is to inform that Suvision Holdings Pvt Ltd ("") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.