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Post Office Monthly Income Scheme
June 07 , 2012

The Post Office Monthly Income Scheme (POMIS) is a scheme offered by the post-offices, where you are paid a fixed and guaranteed interest (currently 8.4%) on your investment. This is extremely safe, and offers better flexibility than the PPF, since you can withdraw money by paying a small penalty, after the first year.

However, in terms of returns, the POMIS is a poor cousin of the PPF. The interest that you get barely beats inflation. Worse, it is taxed based on your overall taxable income for the year. The service delivery in most post offices in India on the POMIS leaves a lot to be desired. Thus, this instrument has become confined largely to the older generation of retirees who trust nothing else, fall below the tax bracket, and have patience to put up with the service quality.

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