POMIS, KVP and Atal Pension Yojana are three government-backed small-savings schemes that serve very different needs — income now, growth over time, and pension later. Here's how each works and who it suits.
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-15
Quick answer
POMIS pays a regular monthly income, KVP grows a lumpsum until it doubles, and Atal Pension Yojana builds a small guaranteed pension. Here's how the three small-savings schemes differ.
The Post Office Monthly Income Scheme takes a lumpsum deposit and pays you a fixed amount of interest every month. It suits people who want a steady, predictable income stream from their savings — retirees and others living off their capital — rather than growth. The principal stays put and is returned at maturity, while the monthly payouts give you cash flow in the meantime.
Kisan Vikas Patra is a lumpsum growth instrument: you invest once and the scheme grows your money at a fixed rate until it doubles after a set period. There's no periodic payout — the appeal is certainty, since you know in advance roughly how long it takes to double. It suits savers who don't need income along the way and simply want safe, guaranteed growth of a one-time amount.
Atal Pension Yojana is aimed at workers in the unorganised sector, building a small fixed monthly pension from retirement age in exchange for regular contributions during your working years. You choose a target pension level and contribute accordingly, with the contribution depending on the pension you pick and the age you join. It's designed for modest, dependable retirement income rather than wealth-building.
These schemes are not all treated the same way for tax, and the interest or payouts can be taxable in your hands. As a rule, treat the returns from POMIS and KVP as taxable income unless a specific exemption applies, and keep contributions and any benefits to Atal Pension Yojana separate in your planning. Because the rules vary by scheme and by your situation, it's worth confirming the exact treatment before relying on it.
The three answer different questions: POMIS for income now, KVP for safe lumpsum growth, and Atal Pension Yojana for a small pension later. None is a substitute for the others, and many savers use them alongside market-linked options for the growth portion. Start from what you actually need — cash flow, certainty, or future pension — and the right scheme usually picks itself.
POMIS pays you a fixed monthly income from a lumpsum deposit while returning the principal at maturity; KVP has no periodic payout and instead grows a lumpsum at a fixed rate until it doubles. One is for income, the other for safe growth.
It's aimed at workers in the unorganised sector who want a small, guaranteed monthly pension from retirement age in return for regular contributions during their working years. You pick a target pension and contribute accordingly.
The interest or payouts can be taxable in your hands, and the rules differ by scheme, so treat the returns as taxable unless a specific exemption applies. It's worth confirming the exact treatment for your situation before relying on it.
Not sure which small-savings scheme fits your goal? Write to the firm and we'll match POMIS, KVP or Atal Pension Yojana to your needs.