Monthly income schemes attract several investors daily due to risk-free investment, guaranteed-high returns, low deposit amounts, capital protection and many more pros. These Government-backed schemes assure their investors get high returns, affordability, and protection and the best part is that the complete investment process is online nowadays. From account opening requests to depositing the instalments to withdrawing the amounts, everything is online and can be done in the comfort of one’s home.
Post Office Scheme Or SBI Monthly Income Scheme
The two of the most favoured monthly income schemes are offered by the State Bank of India and the Post office.
Post Office Monthly Income Scheme
Centre-backed Post Office Monthly Income Scheme is a small-scale investment plan which provides specific financial assistance to the investor every month. The return rate is revised by the Central Government quarterly, which depends upon the returns that Government bonds are providing for the same period. For instance, the interest rate for the tenure of the July-September quarter (FY 2022-22) is set at 6.6 per cent. But you should know that this scheme is not exempted Under Section 80C of the Income Tax, hence the investments made and returns earned are taxable.
A citizen aged above 10 years is eligible to open a POMIS or Post Office Monthly Income Scheme account. The maturity period of this scheme is five years from the date of account opening. This Post office MIS plan has a minimum limit of ₹1,000 to invest and the maximum limit of ₹4.5 lakh, both in the case of an account operated by a single person.
In case a POMIS account is opened and is going to be operated by three joint holders then the maximum investment limit is ₹9 lakh. But there is no limit to how many accounts a single person can hold.
Any premature deposits before three years will attract a 2 per cent deduction at the deposited amount and 1 per cent will be levied when withdrawn after three years.
The largest public sector bank of India- SBI, offers a monthly income scheme called SBI Annuity Deposit Scheme. This scheme requires a person to make a lump sum deposit once and get repayment every month. Of Course, the monthly instalment will consist of both the principal amount and interest earned. SBI annuity deposit scheme offers “three years, five years, seven years, and 10 years, maturity periods. In case of an unexpected death of the investor, premature payments are allowed without any limit.