POMIS vs Fixed Deposit: Which Offers Better Monthly Cash Flow?
Should I invest in Post Office Monthly Income Scheme (POMIS) or a Bank Monthly Payout Fixed Deposit?
Choose POMIS if you want 100% sovereign government backing with automatic monthly interest payouts at 7.40% (up to ₹15 Lakh joint); choose a Bank Fixed Deposit if you want flexible tenures (1 to 10 years), higher senior citizen rates (up to 7.80%-8.00%), or digital netbanking convenience.
Choose Post Office Monthly Income Scheme (POMIS)
Conservative savers wanting guaranteed monthly credited income with 100% sovereign safety.
Choose Bank Fixed Deposit (FD)
Depositors wanting flexible tenures, higher senior rates, cumulative compounding, or netbanking ease.
Interactive Return & Tax Comparison
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Post Office Monthly Income Scheme (POMIS)
Bank Fixed Deposit (FD)
Head-to-Head Criteria Comparison
Direct comparison across key financial dimensions, rules, and statutory boundaries.
| Criteria / Feature | Post Office Monthly Income Scheme (POMIS) | Bank Fixed Deposit (FD) |
|---|---|---|
Current Rate | 7.40% p.a. (Paid Monthly) | 6.80% - 7.50% (General) / 7.30% - 8.00% (Senior) |
Government / Backing Safety | 100% Sovereign Guarantee (Govt of India) | DICGC Insured up to ₹5 Lakh per bank |
Investment Limit | ₹9L Single / ₹15L Joint | No Upper Limit |
Tenure Flexibility | Strictly 5 Years | 7 days to 10 years |
TDS at Source | Zero TDS by Post Office | 10% TDS if interest > ₹40k (₹50k seniors) |
Digital Management | India Post IPPB / Post Office branch | Instant netbanking and mobile app |
Choose Post Office Monthly Income Scheme (POMIS) If:
- •You are a non-senior citizen looking for a guaranteed monthly interest payout at 7.40%.
- •You want 100% sovereign protection without relying on bank DICGC limits.
- •You want to avoid 10% TDS deductions at source.
Choose Bank Fixed Deposit (FD) If:
- •You are a senior citizen eligible for senior rates (7.75%-8.00%) that beat POMIS's 7.40%.
- •You want a tenure shorter or longer than 5 years (e.g., 1, 2, or 3 years).
- •You want cumulative interest compounding rather than monthly payouts.
Real-Life Indian Decision Scenarios
Detailed case studies showing how different tax brackets, ages, and goals alter the optimal choice.
Scenario 1: Non-Senior Couple Seeking ₹9,000 Monthly Cash Flow
Recommendation: Joint POMIS AccountAnalysis: Siddharth and Sunita invest ₹15 Lakh in a Joint POMIS account at 7.40%, receiving a guaranteed ₹9,250 every month with 100% sovereign safety and zero TDS deduction.
Taxation, TDS & Statutory Rules
POMIS Tax
Investment Tax Benefit: Nil.
Growth Tax Benefit: Monthly interest taxable under slab.
Maturity Tax Benefit: Nil.
TDS Rules: Zero TDS by Post Office.
Statutory Reference: Income from Other Sources.
Bank FD Tax
Investment Tax Benefit: Only 5-yr Tax Saver.
Growth Tax Benefit: Taxable on accrual basis.
Maturity Tax Benefit: Nil.
TDS Rules: 10% TDS if interest > ₹40k (₹50k seniors).
Statutory Reference: Section 194A.
Liquidity & Lock-in Test
Post Office Monthly Income Scheme (POMIS): 5 Years. 2% (Yr 1-3); 1% (Yr 3-5). Zero exit in Year 1.
Bank Fixed Deposit (FD): None. 0.5% - 1.0% penalty.
Safety & Guarantee Backing
Post Office Monthly Income Scheme (POMIS): Sovereign (100% Government Guarantee) — Zero (Govt of India).
Bank Fixed Deposit (FD): DICGC Bank Insurance (Up to ₹5 Lakh) — DICGC insured up to ₹5L per bank.
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