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Monthly Income Scheme (MIS) is an investment scheme of Indian postal service. It promises the investor guaranteed returns at 8.5% per annum in the form of fixed monthly income. Seasoned investors consider MIS to be one of the smartest options to park funds as it gives you three merits – keeps your capital intact, yields better returns than debt instruments and assures a fixed monthly income. The money can be withdrawn in two ways, either directly from post office or get it credited in your savings account through ECS. The money is usually meant to be withdrawn on a monthly basis. However, the investor can let it to accumulate over a few months and then withdraw it but it’s not of much use as the idle money will not earn you any interest.

Key Features of Post Office Monthly Income Scheme

The maturity term for MIS is 5 years. Ideally, you should withdraw the amount after 5 years. At the end of the term, you’ll get back every single penny that you had invested. Needless to say, you keep getting your fixed monthly income for this whole period.

However, if you have to withdraw the money before 5 years, here’s what happens.
  • Withdraw the deposit within 1 year – You get nothing
  • Withdraw the deposit in 1 -3 years – You get your deposit back after a nominal 2% deduction (as a penalty)
  • Withdraw the deposit after 3 years - You get your deposit back after a nominal 1% deduction (as a penalty)