10 best investments to get regular monthly income
Eastern Eye Staff
Wondering about the best investment plan for monthly income? Believe it or not, earning a stable monthly income is not an uphill battle. You can easily earn a steady income every month after retirement or even during your professional career if you invest smartly in the right avenues/channels.
Here’s taking a look at the 10 best investment plan for monthly income in India–
- Post Office Monthly Income Scheme (MIS)– The monthly income scheme ensures assured income every month on your investment. This is one of the safest and most preferred investments for a large chunk of Indian citizens and the return rate hovers around 8%. Investment tenures are around 5 years under the post office MIS and you can invest up to Rs. 9 lakh in a joint account and up to Rs. 4.5 lakh in an individual account. Income from interest will be added to your personal income and taxes will be levied on the basis of your tax slab.
- Fixed Deposits– FDs or Fixed Deposits are widely regarded as the best investment plan with high returnsand considerable safety. This is a low-risk investment which is guaranteed by the Government and is offered by almost all leading banks and financial institutions. Those who have lower risk tolerance and wish to earn monthly income by way of interest on their deposit can choose FDs. The returns usually vary between 6-8% per annum, depending on the bank. The interest income will be added to your own income and if your income is still not taxable, you will have to submit Form 15H/15G. TDS is deducted at 10% if interest income exceeds Rs. 10,000. You can always opt for tax-saver FDs which are eligible for tax deductions.
- SCSS – The Senior Citizen Saving Scheme (SCSS) is a special scheme tailored for senior citizens and retirees who are at least 60 years of age or older. The SCSS has a 5-year maturity period which can be extended by another 3 years as well. The return rate is 9% per annum and interest income is paid out every 3 months as well.
- Mutual Fund Monthly Income Plan– Several mutual fund investments come with specific monthly income plans or MIPs and returns could usually be around 8-9% on an average. The returns are not guaranteed owing to market risks and the returns that you get are known as dividends which are tax-free in your hands.
- SWP– The systematic withdrawal plan(SWP) is another mutual fund investment option where you can earn a regular income every month by choosing the same. If you have selected the debt or equity mutual fund in question and SWP facility, you can earn income on a monthly basis. However, the returns are always subject to market risks and you should play your cards very carefully.
- Dividend Payouts from Mutual Funds– Dividends are paid out by some mutual funds to investors and you can choose this option if you do not wish to make direct investments in equity. Dividends are however provided on an annual basis although this is only possible if you have diversified your portfolio and invested across several mutual funds.
- Real Estate– Real estate can be a great source of monthly income if you have bought an additional or second property and let it out on rent. You can earn income regularly via rentals from your real estate investments. This is a great way to supplement your regular income. Of course, there are risks involved in the process including fluctuations in property/rental rates and not finding tenants in a timely manner.
- Government Bonds– You may consider investing in long-term government bonds for earning income regularly. These bonds usually offer half-yearly returns of around 8%. They return the principal amount at the end of the investment tenure while the bonds are also tradable (secondary market) so you can sell them off if you are not satisfied with your returns.
- NPS (National Pension System)– The National Pension System or NPS is another relatively low-risk option for earning regular income after retirement. This is a retirement-based long-term financial product that is managed by the PFRDA (Pension Fund Regulatory and Development Authority). The minimum contribution for the Tier-1 NPS account for remaining active and in operation has been lowered to Rs. 1,000 from Rs. 6,000 as per reports. This is basically a mixture of FDs, liquid funds, equity, government funds and corporate bonds among other investment avenues. On the basis of your own risk appetite, you can choose how much to invest in equities via NPS.
- PMVVY (Pradhan Mantri Vaya Vandana Yojana)– The PMVVY or Pradhan Mantri Vaya Vandana Yojana is a great option for earning monthly income for senior citizens who are at least 60 years of age and above. This gives them assured returns to the tune of 7.4% per annum and there is pension income that can be paid out on a monthly basis as well. You can also choose pension income payouts on half-yearly, yearly or quarterly basis as per your own preferences. The minimum payable amount every month is Rs. 1,000 and the maximum amount that can be paid out on the basis of your investment, is Rs. 9,250 every month. Rs. 15 lakh is the highest amount that you can invest in this particular scheme. The scheme has a tenure of 10 years and is currently available till the 31st of March, 2023. Upon maturity, the amount invested will be repaid to the account holder. In case of death of the account holder, the money will be disbursed to his/her nominee.
On a Closing Note
As evident from the article, there are several options available pertaining to the best monthly income plan in India if you are willing to do it judiciously. One of the above given 10 plans for earning monthly income in India can be considered if you are a beginner in investing. Do your homework and take financial advice before investing.