Post Office MIS: How a ₹9 Lakh Deposit Pays ₹5,550 a Month

The Monthly Income Scheme offers 7.4% annual interest for accounts opened during October–December 2026, with monthly payouts and a five-year term.

A ₹9 lakh investment in the Post Office Monthly Income Scheme can generate ₹5,550 every month at the current annual interest rate of 7.4%.

The scheme converts a lump-sum deposit into regular interest payments. It is an existing government-backed small savings product, rather than a newly launched monthly payment scheme.

India Post lists the MIS interest rate at 7.4% a year, payable monthly. Indian Bank’s published rate schedule confirms that the same rate applies to accounts opened between October 1 and December 31, 2026.

How the ₹5,550 monthly payment is calculated

The calculation uses the deposited amount and the annual interest rate:

₹9,00,000 × 7.4% ÷ 12 = ₹5,550 per month

That produces ₹66,600 in interest over a year. If the account runs for its full five-year term, total interest payments would be ₹3,33,000 before tax.

The original ₹9 lakh is repayable at maturity. The ₹3.33 lakh represents interest distributed during the five years; it is not an additional interest payment waiting at maturity.

How much income can different deposits generate?

The following calculations use the current 7.4% annual rate:

The maximum deposit is ₹9 lakh for a single account and ₹15 lakh for a joint account. The minimum deposit is ₹1,000, with deposits made in multiples of ₹1,000.

The ₹9,250 monthly figure belongs to the joint account as a whole. It is not a separate ₹9,250 payment for each holder.

Does the interest rate change every quarter?

The government reviews small savings interest rates quarterly. For MIS, the rate applicable when an account is opened determines its interest payments for the account’s term.

A later quarterly revision therefore affects newly opened accounts rather than automatically resetting the rate on an existing MIS deposit. Indian Bank’s October–December schedule specifically identifies the rate as applicable to accounts opened during that period.

Early closure reduces the principal returned

MIS has a five-year term, and ordinary premature closure is not permitted during the first year.

After that, deductions apply if the depositor closes the account before maturity:

These deductions are calculated on the deposit, rather than on a single month’s interest. Depositors should confirm the applicable closure date and settlement amount with the post office before submitting a request.

Monthly income does not mean monthly compounding

MIS distributes interest instead of automatically adding it to the principal. Interest left unwithdrawn does not earn additional interest within the MIS account.

Someone who wants their payouts to generate further returns would need to arrange a separate savings or investment option, with its own terms and risks.

Tax and inflation affect the value of the payout

Interest from the scheme is taxable under applicable income-tax rules. The ₹5,550 monthly illustration is therefore a before-tax amount; the effective income depends on the account holder’s tax circumstances.

The payment also remains fixed in rupee terms. If household expenses rise, the same monthly interest will cover a smaller share of spending.

Before depositing a substantial amount, savers should consider how much money they may need during the next five years. MIS can provide predictable income, but early-closure deductions make it important to retain accessible funds for unexpected expenses.