Have you ever thought about securing your retirement income with a safe and government-backed investment that delivers fixed returns and monthly or quarterly payouts?
If yes, then two popular savings schemes from the Indian government deserve your attention in 2025 — the Post Office Monthly Income Scheme (POMIS) and the Senior Citizens’ Savings Scheme (SCSS).
In this article, we'll break down what these two schemes are, their features, eligibility, benefits, drawbacks, and a side-by-side comparison to help you choose the right option based on your needs.
Summary at a Glance
| Criteria | SCSS | Post Office MIS |
|---|---|---|
| Interest Rate | 8.2% (Quarterly) | 7.4% (Monthly) |
| Payout Frequency | Quarterly (every 3 months) | Monthly |
| Tenure | 5 years (extendable by 3 years) | 5 years (no extension) |
| Tax Benefit | Eligible under Section 80C (up to ₹1.5 lakh) | Not eligible for any 80C deduction |
| Investment Limit | Up to ₹30 lakh (individual or joint with spouse) | ₹9 lakh (individual), ₹15 lakh (joint) |
| Who Can Invest | Indian citizens aged 60+ (or 55+ under VRS) | All Indian residents aged 18+; minors via guardian |
| Best For | Retirees looking for safe fixed income + tax savings | Risk-averse investors wanting monthly income |
Now we will discuss it all in detail:
What is Post Office MIS?
The Post Office Monthly Income Scheme (POMIS) is a fixed-income investment option backed by the Government of India. It is best suited for those looking for guaranteed monthly income without risking their capital.
Key Features:
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Interest Rate (July–September 2025): 7.4% per annum (payable monthly)
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Tenure: 5 years
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Minimum Deposit: ₹1,000
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Maximum Investment:
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₹9 lakh (individual)
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₹15 lakh (joint account)
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Payout: Interest credited monthly via ECS or savings account
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Premature Withdrawal: Allowed after 1 year with penalty (2% before 3 years, 1% after 3 years)
Example:
If you invest ₹9,00,000 (the max limit for individuals), you’ll receive ₹5,550 per month in interest.
Also Read - Post Office MIS Interest Rate July–September 2025: Invest ₹9 Lakh & Earn ₹5,550 Every Month
What is SCSS?
The Senior Citizens’ Savings Scheme (SCSS) is specifically designed for retired individuals aged 60+ (or 55+ under VRS). It offers higher returns than most fixed-income options and is one of the safest post-retirement instruments.
Key Features:
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Interest Rate (2025): 8.2% per annum (payable quarterly)
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Tenure: 5 years (extendable by 3 years)
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Minimum Investment: ₹1,000
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Maximum Limit: ₹30 lakh (from April 1, 2023)
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Tax Benefits: Eligible for deduction under Section 80C
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TDS: Applicable if interest exceeds ₹50,000/year
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Account Type: Individual or joint (with spouse)
Example:
Investing ₹5,00,000 in SCSS would earn you ₹10,250 every quarter, thanks to its 8.2% annual return.
Also Read - Earn 8.2% Interest! Senior Citizens' Savings Scheme Backed by Government
Eligibility Criteria
SCSS Eligibility:
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Indian citizens aged 60 years or above
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Retirees aged 55–60 years under VRS or superannuation
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Retired defence personnel from the age of 50 (with conditions)
Post Office MIS Eligibility:
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All Indian residents above 18 years
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Minors above 10 can invest via a guardian
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NRIs are not eligible for either scheme
Key Benefits Comparison
| Benefit Area | Post Office MIS | SCSS (Senior Citizen Savings Scheme) |
|---|---|---|
| Scheme Type | Monthly Income Scheme | Retirement-focused Fixed Income Scheme |
| Government Backing | ✅ 100% Government-Backed | ✅ 100% Government-Backed |
| Eligibility | All Indian residents (18+); Minors via guardian | Indian citizens aged 60+, or 55+ (VRS/retired); Defence personnel from age 50 (with conditions) |
| Interest Rate (Q2 FY 2025) | 7.4% per annum (paid monthly) | 8.2% per annum (paid quarterly) |
| Tenure | 5 years | 5 years (extendable by 3 years) |
| Minimum Investment | ₹1,000 | ₹1,000 |
| Maximum Investment | ₹9 lakh (individual), ₹15 lakh (joint) | ₹30 lakh (individual or joint with spouse) |
| Tax Benefits on Deposit | ❌ Not eligible under Section 80C | ✅ Eligible under Section 80C (up to ₹1.5 lakh/year) |
| Interest Payout Frequency | Monthly (credited via ECS or PO savings account) | Quarterly (every 3 months) |
| Tax on Interest Earned | ✅ Fully taxable (no TDS if monthly interest ≤ ₹10,000) | ✅ Fully taxable; TDS applicable if interest > ₹50,000/year |
| Account Holding Options | Single or Joint (any individual) | Single or Joint (only with spouse) |
| Premature Withdrawal | Allowed after 1 year with penalty (2% < 3 yrs; 1% ≥ 3 yrs) | Allowed with penalties (1% or 1.5% based on time of closure) |
| Extension Facility | ❌ Not available | ✅ Extendable for 3 years after 5-year term |
| Capital Protection | ✅ Yes – principal fully protected | ✅ Yes – principal fully protected |
| Income Type | Monthly payouts – ideal for fixed monthly needs | Quarterly income – good for planned withdrawals |
| Opening Facility | Post Office branches only | Post Office & Authorized Banks (SBI, HDFC, ICICI, etc.) |
| Target Audience | General public, homemakers, fixed-income seekers | Senior citizens, retired employees, pensioners |
Limitations
SCSS Limitations:
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Only available to senior citizens
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TDS applicable if interest > ₹50,000/year
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Interest paid quarterly (not monthly)
MIS Limitations:
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No tax benefits under 80C
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Lower interest than SCSS
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Premature withdrawal comes with penalties
Returns Comparison: MIS vs SCSS (2025)
| Investment Amount | MIS Monthly Income (at 7.4%) |
SCSS Quarterly Income (at 8.2%) |
|---|---|---|
| ₹50,000 | ₹308 | ₹1,025 |
| ₹1,00,000 | ₹617 | ₹2,050 |
| ₹2,00,000 | ₹1,233 | ₹4,100 |
| ₹3,00,000 | ₹1,850 | ₹6,150 |
| ₹4,00,000 | ₹2,467 | ₹8,200 |
| ₹5,00,000 | ₹3,083 | ₹10,250 |
| ₹6,00,000 | ₹3,700 | ₹12,300 |
| ₹7,00,000 | ₹4,317 | ₹14,350 |
| ₹8,00,000 | ₹4,933 | ₹16,400 |
| ₹9,00,000 | ₹5,550 | ₹18,450 |
| ₹10,00,000 | ₹6,167 | ₹20,500 |
| ₹15,00,000 | ₹9,250 | ₹30,750 |
Note: Figures are approximate, based on current interest rates.
Which is Best in 2025?
If you’re a senior citizen aged 60+:
Go for SCSS. You’ll get:
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Higher interest (8.2%)
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Tax benefit under 80C
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Capital safety
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Fixed quarterly income
Example: A 65-year-old retiree investing ₹15 lakh in SCSS could earn ₹1,23,000 every year for 5 years + and enjoy tax deduction.
If you’re below 60 or prefer a monthly income:
POMIS is the better choice:
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Available to all age groups
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Offers fixed monthly returns
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Simple and stable
Example: A 45-year-old homemaker investing ₹9 lakh in MIS would earn ₹5,550/month with zero market risk.
Final Verdict
SCSS is ideal if you're retired and looking for maximum returns with tax savings.
POMIS is best if you’re younger or need monthly cash flow from a safe, fixed-income scheme.
Pro Tip: Eligible senior citizens can invest in both to get the best of monthly and quarterly income.
FAQs
1. What is the current interest rate for SCSS in 2025?
8.2% per annum (payable quarterly), valid for Q2 FY 2025.
2. Can I open both MIS and SCSS accounts?
Yes, if eligible, you can invest in both separately within their individual limits.
3. Are returns from these schemes taxable?
Yes. SCSS has TDS on interest > ₹50,000/year. MIS interest is taxable, but no TDS ifthe monthly interest ≤ ₹10,000.
4. Can I close the account before maturity?
Yes, both schemes allow premature closure with applicable penalties.
5. Which one is better for monthly income?
POMIS, as it offers monthly payouts, while SCSS pays quarterly.
Related Topics You’ll Love:
Whether you’re a senior citizen planning your retirement or a risk-averse investor seeking monthly income, Post Office MIS and SCSS both offer safe, government-backed savings solutions.
Choose the one that fits your goals—or even combine both for diversified, fixed returns.
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