Investment plans for monthly income in India

It’s no secret that financial security in life plays a crucial role in providing peace of mind. And, with a reliable monthly source of income, you can keep numerous, if not all, stressors of life at bay.
Investment schemes, such as monthly income plans are designed to provide a regular income, thereby offering a degree of financial security. These plans come with various features that make them an attractive investment option.

Here’s a look at some of the best investment options for generating fixed monthly income plans in India.

Investment plans for monthly income

Here’s a list of some of the monthly income plans that you could look at:

1. Senior Citizen Saving Scheme
2. Post Office Monthly Income Scheme (POMIS)
3. Long-Term Government Bonds
4. Life Insurance Plus Saving

Factors to consider before investing in monthly income schemes:

There are certain important factors that investors must consider before investing in monthly income plans.
Interest rates: The foremost factor to consider while investing in these schemes is the interest rates offered by them. Compare the interest rates offered by different schemes before investing to maximise the returns.
Risk appetite: Assessing your risk appetite is crucial when investing in any monthly income scheme. While some schemes are riskier than others, you should select the one that aligns with your risk profile.
Investment horizon: The next factor to consider is the tenure of the investment. This will directly impact your returns. If you have a short investment horizon, then you should consider schemes with shorter tenures.
Tax implications: Understanding the tax implications of the investment is also very important. You can also opt for some investment options that offer tax benefits. This will help in reducing your tax liability for a specific period.

Features of monthly income plans:

Monthly income plans are attractive investment options for investors seeking regular income. Let us look at the key features of monthly income plans that are available in the market:
Regular income: The money invested in these monthly income plans can generate regular income for investors. This income can be in the form of interest and paid monthly. Some schemes also offer returns quarterly or annually.
Interest rates: The interest rates offered by different monthly saving schemes may vary. These interest rates depend on the investment option chosen and can be fixed or variable. For instance, monthly income plans based on fixed deposits generally offer a fixed rate of interest, while mutual fund-based plans can offer a variable rate of return.
Tenure: The investment tenure also varies from one scheme to another. It can range from a few months to several years.
Risk: The degree of risk these monthly income plans carry is also different depending on the investment option chosen. You must analyse your risk-appetite carefully before investing in a monthly income plan.

Benefits of buying a monthly income plan:

Regular Income: These plans offer financial stability as they can provide regular income, thereby allowing investors to meet financial needs without dipping into savings.
Diversification: Various investment options offer monthly income plans. Investors can diversify their portfolios to mitigate the investment risk.
Flexibility: An important benefit of fixed monthly income plans is that they offer flexibility in terms of investment amounts, pay-out options, and tenures. Investors can choose an investment option that suits their financial goals and risk appetite.
Taxation: Some monthly income plans also offer tax benefits to investors, while others are subject to tax at the applicable rates.

To sum it up, investing in monthly income plans can help you generate a steady income stream and offer a range of benefits. However, it can be difficult to zero in on investment plans for monthly income. Therefore, it is essential to research the advantages of the different investment options and consider your risk appetite before investing in any of these schemes.

FAQs:

What can I invest in to get monthly income?

You can invest in multiple investment options to generate monthly income. Some of the investment plans for monthly income include bank’s fixed deposit, senior citizen saving scheme, post office monthly income scheme, and mutual funds, among others.

What is the minimum investment required for monthly investment schemes?

The minimum investment amount required for monthly income investments varies depending on the investment option. For example, the minimum investment amount for Senior Citizen Saving Scheme is Rs.1,000.

What is the rate of return on monthly income investments?

The interest on monthly return investment plan may vary for different investment options and is dependent upon the prevailing market conditions. For instance, POMIS offers interest at a rate of 7.4% and SCSS offers an interest rate of 8.2%. (Data as on 3-April 2023)

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

This document should not be treated as endorsement of the views/opinions or as an investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.