Quick Answer
India Post does not offer SWP (Systematic Withdrawal Plan). SWP is a mutual fund feature — it redeems units at NAV to pay you a fixed amount each month. Post Office sells government-backed savings schemes, not mutual funds, so there’s no NAV to redeem from. The closest Post Office alternatives for monthly income are the Post Office Monthly Income Scheme (POMIS), paying 7.4% annually, and the Senior Citizen Savings Scheme (SCSS), paying 8.2% annually.
Why “SWP in Post Office” Doesn’t Exist
This is one of the most searched post office queries — and a reasonable one, because SWP has become the default mental model for “monthly income from savings” after years of mutual fund advertising. But SWP and Post Office schemes work on fundamentally different mechanics.
An SWP redeems a fixed number of mutual fund units every month, at whatever the NAV happens to be that day. Your payout comes from selling part of your investment — so your corpus can grow, shrink, or stay flat depending on how the market performs against your withdrawal rate. Post Office schemes don’t have units or NAV at all. You deposit a lump sum, the government pays you fixed interest on it, and your principal is returned at maturity. There’s nothing to “redeem” because there’s no fund to redeem from.
So when people search for SWP in Post Office, what they’re usually looking for is guaranteed monthly income from a government-backed source — and that need is real. It’s just served by a different product.
The Real Post Office Alternative: POMIS
The Post Office Monthly Income Scheme (POMIS) is the closest thing India Post offers to an SWP-style monthly payout. You deposit a lump sum once, and the post office credits fixed interest to your savings account every month for five years.
Interest Rate
7.4%
per annum, paid monthly · unchanged since April 2023
Max Investment
₹9L / ₹15L
single account / joint account
| Feature | Detail |
|---|---|
| Interest rate | 7.4% p.a., paid out monthly |
| Minimum investment | ₹1,000 (multiples of ₹1,000) |
| Maximum investment | ₹9,00,000 single · ₹15,00,000 joint · ₹3,00,000 minor |
| Tenure | 5 years, with reinvestment option at maturity |
| Premature withdrawal | Allowed after 1 year — 2% penalty (1–3 yrs), 1% penalty (3–5 yrs) |
| Section 80C benefit | None |
| Tax on interest | Fully taxable at your income tax slab rate |
| TDS | Not deducted on POMIS interest |
How much monthly income does POMIS actually pay?
| Investment | Account type | Monthly interest |
|---|---|---|
| ₹1,00,000 | Single | ≈ ₹617 |
| ₹3,00,000 | Single | ≈ ₹1,850 |
| ₹9,00,000 | Single (max) | ₹5,550 |
| ₹15,00,000 | Joint (max) | ₹9,250 |
SCSS: The Higher-Paying Cousin (60+ Only)
If you or your investing parent is 60 or older, the Senior Citizen Savings Scheme pays a meaningfully higher rate than POMIS — and is also available through Post Office counters.
| Feature | Detail |
|---|---|
| Interest rate | 8.2% p.a., paid quarterly |
| Eligibility | 60+ years; 55–60 if retired (VRS/superannuation); 50+ for retired defence personnel |
| Minimum investment | ₹1,000 |
| Maximum investment | ₹30,00,000 per individual (₹60,00,000 for a couple, individually) |
| Tenure | 5 years, extendable once by 3 years |
| Section 80C benefit | Yes, deposits qualify for deduction |
| Tax on interest | Fully taxable; TDS applies above ₹50,000 interest/year; 80TTB deduction available |
At the maximum ₹30 lakh investment, SCSS generates roughly ₹61,500 per quarter (≈ ₹20,500/month average). A retired couple investing the full ₹60 lakh between two individual accounts can structure close to ₹41,000/month in guaranteed quarterly income — entirely government-backed.
POMIS / SCSS vs Mutual Fund SWP — The Real Comparison
This is the decision that actually matters. Each option trades off differently on growth, tax, and risk.
| Parameter | POMIS | SCSS | Mutual Fund SWP |
|---|---|---|---|
| Underlying mechanism | Fixed govt. interest | Fixed govt. interest | Unit redemption at NAV |
| Indicative rate | 7.4% p.a. | 8.2% p.a. | Market-linked, not guaranteed |
| Capital safety | Sovereign guarantee | Sovereign guarantee | Market risk — no guarantee |
| Payout flexibility | Fixed, can’t be changed | Fixed, can’t be changed | Fully adjustable anytime |
| What’s taxed | Entire interest, at slab rate | Entire interest, at slab rate | Only the gains portion, at LTCG/STCG rates |
| Corpus over time | Returned intact at maturity | Returned intact at maturity | Can grow, shrink, or deplete |
| Inflation protection | None — fixed payout erodes in real terms | None — fixed payout erodes in real terms | Possible, if returns exceed withdrawal rate |
| Lock-in | 5 years | 5 years (+3 optional) | None (exit load may apply briefly) |
| Best suited for | Zero-risk baseline income | Seniors wanting the highest guaranteed rate | Investors wanting tax efficiency + growth potential |
The tax gap is the part most people miss
On POMIS or SCSS, every rupee of interest you receive is added to your taxable income and taxed at your slab rate — so a 30% bracket investor effectively loses nearly a third of the stated return. With mutual fund SWP, only the capital-gains portion of each withdrawal is taxable. Under the Budget 2024 LTCG rules, equity fund gains held over a year are taxed at 12.5% beyond a ₹1.25 lakh annual exemption, while the principal portion of every SWP installment passes through tax-free. For an investor in a higher tax bracket withdrawing the same monthly amount, SWP’s post-tax income can come out meaningfully ahead of POMIS or SCSS — provided the underlying fund performs reasonably and the investor accepts market risk.
Worked example: A ₹15 lakh joint POMIS account pays a guaranteed ₹9,250/month, fully taxable. The same ₹15 lakh in a hybrid or debt-oriented mutual fund running an 8% annual SWP would target a similar ₹10,000/month, but with only the gains portion taxed — and the potential, not the certainty, for the corpus to outlast 25+ years if market returns exceed the withdrawal rate.
Which One Should You Actually Use?
- Choose POMIS if you want zero market risk, a simple 5-year product, and don’t need the absolute highest rate.
- Choose SCSS if you’re 60+ and want the highest guaranteed, government-backed rate available anywhere in the small savings basket.
- Choose mutual fund SWP if you’re comfortable with market-linked returns in exchange for better tax efficiency, full payout flexibility, and a real shot at your corpus growing rather than just being returned intact.
- Combine them — many retirees use POMIS or SCSS to cover fixed monthly essentials with a guarantee, and run SWP from equity or hybrid funds for the discretionary, inflation-beating portion of their income.
Frequently Asked Questions
Does Post Office offer SWP (Systematic Withdrawal Plan)?
No. SWP is a mutual fund feature that redeems units at NAV. India Post doesn’t sell mutual funds, so it can’t offer SWP. POMIS and SCSS are the closest equivalents — both pay fixed interest instead.
What is the current POMIS interest rate in 2026?
7.4% per annum, paid monthly, for the April–June 2026 quarter. This rate has held steady since April 2023.
Which is better for monthly income — POMIS or mutual fund SWP?
POMIS suits investors who want a fixed, guaranteed payout with no market risk. SWP suits those comfortable with market-linked returns in exchange for better tax efficiency and growth potential. Many retirees use both together.
Can I get more than ₹9,250 a month from Post Office schemes?
Yes — by combining schemes. A joint POMIS account pays ₹9,250/month at the ₹15 lakh cap, and SCSS adds roughly ₹20,500/month per person at the ₹30 lakh cap. A senior couple using both can structure well over ₹50,000/month in guaranteed income.
