It is not at all tough to open an account in the Post Office Monthly Income Scheme.
The following is the process which an investor needs to follow for opening an account in the Post Office Monthly Income Scheme:
The following terms and conditions prevail, in case, if the investor withdraws the deposit amount before the maturity period i.e. 5 years:
This scheme is specially created for such investors who do not want to face any risks, who are not interested in investing in equity related instruments, and who are searching for such scheme which can give a fixed monthly income. It is particularly meant for senior citizens, and for those who have just stopped working and will no longer receive any salary and are set to deposit in a scheme to receive a fixed amount every month that can be used to keep up with their standard of living. Thus, basically, the Post Office Monthly Income Scheme was introduced so that there can be a steady flow of income for a longer period.
Mr. X opts to put his money in Post Office Monthly Income Scheme. He puts in Rs. 1, 00,000/- for a maturity of five years. An interest rate of 8.5% per annum will offer him Rs. 708/- every month. . At the maturity of this scheme, he will receive all his deposit money back.
Mr. X can withdraw the money in two ways- i.e. either collect it from the post office where he deposited the amount, or he can get it transferred to his savings account through ECS. However, money can be actually withdrawn every month by Mr. X. Mr. X can let all the money get collected for some months at a time and afterwards, withdraw the amount. However, it is not advisable to let the money get collected for some months as it will not give Mr. X with any interest.
A new aspect was further added to make the Post Office Monthly Income Scheme more successful. The investor would have an opportunity to club his Post Office Monthly Income Scheme with a recurring deposit. In this new feature, the interest that earned through Post Office Monthly Income Scheme can be further invested in recurring deposits which would have allowed an investor to make more money.
Currently, the rate of interest on the amount deposited in this scheme is 7.30% per annum. Also, the interest amount which will be receivable every month can be further invested in recurring deposits at the rate of 7.30% per annum.
Thus, the main motive behind the investors investing in Post Office Monthly Income Scheme is that they are guaranteed to get a fixed amount of money in the form of interest every month which will be treated as a regular income for them. Although it doesn’t have any tax incentives, it is still preferred as an investment option by the small time investors.
In case if you feel that this scheme is worth investing in. then do consider it at the earliest and invest some money in the scheme.
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