Post Office MIS Calculator
Your monthly income, and what an early exit actually costs
What an early exit actually costs you
| If you close at | Penalty | You walk away with |
|---|---|---|
| Enter an amount | ||
The trap after maturity that costs people real money
When your 5 years end, MIS does not renew itself. If you leave the money sitting there, it stops earning 7.4% and starts earning the Post Office Savings Account rate of 4% instead, for up to two years. After that the account is treated as closed.
Put a reminder in your phone for the maturity date. On that day, either withdraw the money or open a fresh MIS account at the rate then prevailing.
- Monthly interest is deposit × 7.4% ÷ 12. MIS pays simple interest monthly and does not compound.
- The rate is fixed at the current 7.4%. Once your account is open, that rate is locked for all five years even if the government revises it later.
- Your principal is returned in full at maturity. It does not grow.
- Deposits must be in multiples of ₹1,000, minimum ₹1,000.
- The first payout comes one month after you open the account, not at the start of the month.
- Interest is fully taxable at your slab rate and gets no 80C deduction, though no TDS is deducted. You must declare it yourself.
What Most MIS Calculators Do Not Tell You
The arithmetic behind Post Office MIS is simple. Your deposit multiplied by 7.4%, divided by twelve. Every calculator online does that correctly.
Two things they leave out cost people real money.
1. A joint account eats into each holder's personal limit
The scheme allows ₹9 lakh in a single account and ₹15 lakh in a joint account. People read that and assume a joint account is simply a bigger box.
It is not. In a joint account, each holder is treated as owning an equal share for the purposes of the limit. So a ₹15 lakh joint account held by two people uses ₹7.5 lakh of each person's ₹9 lakh capacity.
After that, each of them can hold only ₹1.5 lakh more in MIS, not ₹9 lakh. The calculator above works this out for you when you select a joint account.
2. Your money quietly drops to 4% after maturity
MIS does not renew itself. When the five years end, the account stops paying 7.4%.
If you leave the money there, it earns the Post Office Savings Account rate of 4% for up to two years, after which the account is treated as closed. On a ₹9 lakh deposit, that is a drop of about ₹30,600 a year for doing nothing.
Set a reminder for your maturity date. On that day, either take the money out or open a fresh MIS account at the rate prevailing then.
How Post Office MIS Works
| Rule | Detail |
|---|---|
| Interest rate | 7.4% per year, paid monthly, reviewed quarterly by the government |
| Rate lock | Fixed for your full 5 year term from the day you open the account |
| Tenure | 5 years, cannot be extended |
| Minimum deposit | ₹1,000, in multiples of ₹1,000 |
| Maximum, single account | ₹9 lakh |
| Maximum, joint account | ₹15 lakh, with up to 3 adults |
| Limit applies | Across all your MIS accounts combined |
| Compounding | None. Interest is paid out, not reinvested. |
| Tax deduction | None. MIS does not qualify under Section 80C. |
| Tax on interest | Fully taxable at your slab, but no TDS is deducted |
| Where to open | Any post office, using Form 1 |
The Rate Lock Is the Underrated Feature
Small savings rates are reviewed every quarter, which makes people nervous about committing.
With MIS, the rate that applies on the day you open the account stays fixed for the whole five years. If the government cuts the rate next quarter, your account is untouched. You keep 7.4% until maturity.
The reverse also holds. If rates rise, your existing account does not benefit. You would need to close it, take the penalty, and reopen.
This matters most when rates look likely to fall. Opening an account now locks the current rate for sixty months.
What You Get, at Each Deposit Level
| You deposit | Every month | Every year | Over 5 years |
|---|---|---|---|
| ₹1,00,000 | ₹617 | ₹7,400 | ₹37,000 |
| ₹3,00,000 | ₹1,850 | ₹22,200 | ₹1,11,000 |
| ₹5,00,000 | ₹3,083 | ₹37,000 | ₹1,85,000 |
| ₹9,00,000, single account maximum | ₹5,550 | ₹66,600 | ₹3,33,000 |
| ₹15,00,000, joint account maximum | ₹9,250 | ₹1,11,000 | ₹5,55,000 |
In every case, your full principal comes back at the end. MIS pays you an income, it does not grow your capital.
Leaving Early
MIS is a five year commitment, and the exit rules are strict.
- In the first 12 months, you cannot close the account at all. There is no early exit, for any reason.
- Between 1 and 3 years, closing costs you 2% of your principal.
- Between 3 and 5 years, it costs 1% of your principal.
You keep all the interest already paid to you. The penalty comes off the principal you get back, not off the income you have already received. The calculator above shows exactly what you would walk away with at each point.
In the event of the account holder's death before maturity, the account is closed and the principal is returned to the nominee, with interest paid up to the preceding month. The lock-in does not apply.
The Tax Position, Stated Plainly
Two things are commonly misunderstood here.
MIS gets no Section 80C deduction. Unlike PPF or the 5 year Post Office time deposit, the money you put into MIS cannot be claimed as a deduction.
The interest is fully taxable, but no TDS is deducted. That is a trap in itself. Because nothing is withheld at source, the money arrives in your account looking untaxed. It is not. You must declare it as income from other sources and pay tax at your slab rate.
For someone in the 30% bracket, a headline 7.4% is closer to 5.18% after tax. For someone with no taxable income, it stays 7.4%. That difference is worth thinking about before choosing MIS over an alternative.
Who MIS Actually Suits
It suits you if you have a lump sum and you need predictable monthly cash rather than growth. Retirees, people between jobs, families covering a fixed monthly expense such as rent or a parent's medical costs.
It does not suit you if you want your money to grow. MIS pays the interest out, so nothing compounds. Your ₹9 lakh is still ₹9 lakh after five years.
If you are 60 or above, look at the Senior Citizen Savings Scheme first. It pays a higher rate with the same government backing, though the payout is quarterly rather than monthly.
If you do not need the monthly cash, a scheme that compounds will leave you with more at the end.
Opening an Account
- You need a Post Office savings account first, since the monthly interest is credited to it or transferred by ECS.
- Collect Form 1 at the counter or download it.
- Carry your Aadhaar, PAN, a passport size photograph, and a cancelled cheque or bank passbook for the ECS mandate.
- Deposit by cash, cheque or demand draft.
- Collect your passbook and keep it safe. You need it for every future transaction including maturity.
Your first interest payment arrives one month after the account is opened, not at the start of the following month.
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