Fixed Income

Fixed Income

National Savings Monthly Income Compare

Summary
Quick DescriptionSafe and secure way to save money and earn interest via deposits in the National Savings Monthly Income scheme
CategoryFixed Income
Returns *7.4%
Risk LevelLow
LiquidityLiquid after 1 year of investment
Tax Implications
  • Capital Gains - Not Applicable
  • Interest - Taxed as per investors’ tax slab.

Quick Description

National Savings Monthly Income Scheme is a type of deposit offered by the Indian Postal Service. It is a safe and secure way to save money and earn regular interest. Investors receive monthly interest payments on the amount that they invest in this scheme. At maturity, investors get back their total invested amount plus any pending interest at maturity.

Additional Useful Information

  • The minimum amount required to invest in the National Savings Monthly Income account is ₹1000.
  • The maximum investment limit is ₹9,00,000 for single account holders.
  • The maximum investment limit is ₹15,00,000 for joint account holders.
  • The maturity period for this scheme is 5 years.
  • Investors can withdraw the deposit, but only after 1 year of the investment date.
  • Interest payments are made monthly.
  • This mode of investing is suitable for investors who require regular income with negligible risk.

Returns *

  • The National Savings Monthly Income scheme guarantees returns.
  • There is only one component of return in this scheme. This is the interest payment received monthly.
  • Currently, 7.4% interest per year can be earned in this mode of investment.

Risk Level

  • The National Savings Monthly Income scheme is a low-risk investment option as it is backed by the Government of India.
  • This means that investments in a National Savings Monthly Income scheme are safe and secure since the government can never default.

Liquidity

  • The National Savings Monthly Income scheme is a relatively illiquid investment option since investors cannot withdraw funds in this scheme for the first 1 year of investment.
  • However, after completion of 1-year, premature withdrawal as well as redemption can be done at any time. This makes this scheme liquid after 1 year.

Interesting Facts

  • The National Savings Monthly Income scheme provides flexibility in transferring this scheme from one post office to another.
  • Closure of account in the National Savings Monthly Income scheme after 1 year but before 3 years will result into 2% of deduction from the invested amount.
  • Closure of account in the national savings monthly income scheme after 3 but before 5 years will result into 1% of deduction from the invested amount.

Tax Implications

  • This scheme is taxable. Taxes are levied based on the interest collected.
  • There is no capital gains tax applicable.
  • Any Interest that investors receive is added to their taxable income and they need to pay tax according to their income slab.

Where To Invest

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