What Is Post Office MIS?
Post Office Monthly Income Scheme (MIS) is a government-backed savings scheme run through India Post that pays a fixed monthly income on a lump sum deposit, at 7.4% per annum, over a fixed 5-year term.
MIS is built for a specific job: a predictable monthly payout, not growth. The interest does not compound inside the account. It is calculated once a year on the original deposit and paid out in equal monthly instalments, and the deposit itself comes back in full when the account matures.
The scheme is offered under the Post Office Savings Schemes framework governed by the Ministry of Finance, the same authority that reviews the interest rate every quarter alongside PPF, NSC, and SCSS.
MIS Monthly Income Formula
Monthly Income = Deposit x Annual Rate / 12 / 100On a Rs 9 lakh deposit at the current 7.4% rate, monthly income is Rs 9,00,000 x 7.4 / 12 / 100, which comes to Rs 5,550 a month. Over the full 60-month term, that totals Rs 3,33,000, with the Rs 9 lakh principal returned separately at maturity.
| Method | Formula |
|---|---|
| Direct formula | =Deposit*Rate/12/100 |
| With a named rate cell | =Deposit*$Rate$/12/100 (fill down for each month, rate stays constant) |
MIS Monthly Income by Deposit Amount
Monthly income scales directly with your deposit at the same 7.4% rate. The table below covers common deposit sizes up to the Rs 9 lakh single-account cap.
| Deposit | Monthly Income | Total Over 5 Years |
|---|---|---|
| Rs 1,00,000 | Rs 617 | Rs 37,000 |
| Rs 3,00,000 | Rs 1,850 | Rs 1,11,000 |
| Rs 5,00,000 | Rs 3,083 | Rs 1,85,000 |
| Rs 7,00,000 | Rs 4,317 | Rs 2,59,000 |
| Rs 9,00,000 | Rs 5,550 | Rs 3,33,000 |
| Rs 15,00,000 (joint) | Rs 9,250 | Rs 5,55,000 |
MIS Plus RD: Turning a Non-Compounding Scheme Into a Compounding One
MIS interest does not compound, since it is paid out every month rather than added back to the deposit. A common workaround is redirecting the monthly payout into a Post Office Recurring Deposit instead of spending it, which lets that portion of the money compound quarterly.
On a Rs 9 lakh MIS at 7.4% (Rs 5,550 a month) redirected into an RD at the current 6.7% rate, the RD builds to approximately Rs 3,96,080 by the end of year 5, against Rs 3,33,000 invested into it, an extra Rs 63,080 earned purely from the reinvestment. Toggle "Reinvest monthly income into an RD" above to see this for your own numbers.
RD Calculator
Run the RD math on its own, with any monthly deposit and tenure.
MIS vs Bank FD: What's the Difference?
| Feature | Post Office MIS | Bank FD |
|---|---|---|
| Payout style | Fixed monthly income, principal at maturity | Compounds; payout at maturity or chosen frequency |
| Tenure | Fixed 5 years | Flexible, 7 days to 10 years |
| Investment cap | Rs 9 lakh single, Rs 15 lakh joint | No upper limit |
| Guarantee | Government of India, sovereign-backed | DICGC insured up to Rs 5 lakh per bank |
| 80C benefit | None | Only on the specific 5-year tax-saving FD |
Compare exact numbers on the Liquid Fund vs FD Calculator or the Bank Interest Rate Comparison Calculator before deciding between MIS and a bank FD.
MIS vs SCSS: Which Should You Choose?
Senior Citizen Savings Scheme (SCSS) is restricted to those aged 60 and above (55+ for VRS or superannuated retirees), pays a higher rate than MIS, and allows deposits up to Rs 30 lakh with quarterly rather than monthly payouts. MIS has no age restriction and pays monthly, which suits anyone wanting a shorter commitment or a strictly monthly cash flow, not just retirees.
Premature Withdrawal Rules
MIS cannot be closed at all before 1 year. Closing between 1 and 3 years costs a 2% deduction from the principal. Closing between 3 and 5 years costs a 1% deduction. After 5 years, the full principal comes back with no deduction.
| Holding Period | Deduction |
|---|---|
| Before 1 year | Withdrawal not allowed |
| 1 to 3 years | 2% of principal |
| 3 to 5 years | 1% of principal |
| After 5 years (maturity) | None, full principal returned |
MIS Taxation
MIS interest is fully taxable at your income tax slab rate, added to your total income for the year it is received. The post office does not deduct TDS on this interest, unlike a bank FD above the TDS threshold, but the income must still be declared. MIS does not qualify for Section 80C, unlike NSC, the 5-year tax-saving bank FD, or PPF.
Limitations of This Calculator
The rate changes quarterly. 7.4% applies to accounts opened in the April-June 2026 quarter. An account opened in a later quarter locks in whatever rate the Ministry of Finance notifies for that quarter, not necessarily 7.4%.
RD reinvestment assumes perfect discipline. The MIS + RD projection assumes every single monthly payout is redirected into the RD without exception. Skipping even one month reduces the final RD value below what is shown here.
Tax is not deducted from the figures shown. Monthly income and totals shown are gross, before your own income tax liability on that interest.
How to Use This Post Office MIS Calculator
- Choose account type: single (up to Rs 9 lakh) or joint (up to Rs 15 lakh).
- Enter your deposit amount: the lump sum you plan to invest, within the applicable limit.
- Check the rate: defaults to the current 7.4%; adjust if a new quarterly rate has been notified.
- Toggle MIS + RD reinvestment: turn this on to see the combined value if your monthly payout goes into an RD instead of being spent.
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Frequently Asked Questions
Disclaimer: All calculations on this page are indicative only. The Post Office MIS interest rate is reviewed quarterly by the Ministry of Finance and applies only to accounts opened in that quarter; it may change for future quarters. MIS + RD reinvestment figures assume every monthly payout is redirected without exception and use the current Post Office RD rate as an assumption. Interest shown is gross and does not account for your personal income tax liability. This calculator is for educational and planning purposes only and does not constitute financial advice. Consult a SEBI-registered investment adviser or a chartered accountant before making investment or tax decisions.