Investing in lucrative investment instruments should be in everyone’s financial plan. This is because having more than one stream of income is an effective means to achieve financial goals, build a corpus, and even accumulate wealth. Monthly income plans are deemed to be the best option for mobilizing savings and generating steady but regular income. This makes them desirable for those looking to generate a steady income source. Today, the market has multiple options to generate income. However, individuals should first recognize their needs and then proceed to check the Best investment plans for monthly income.
That said, let’s explore some of the best investment plan for monthly income.
Senior Citizen Saving Scheme
A senior citizen savings plan is indeed an excellent investing choice, especially for senior citizens, and is an ideal scheme for generating steady monthly income. Notably, SCSS is backed by the government and allows only those over the age of 60 years to invest.
This scheme is available at specific bank branches and all post offices and can be held for 5 years. The SCSS allows individuals to invest a maximum of Rs. 15 lakhs. Individuals can consider joining the plan within a month after retiring. Notably, the interest earned on the scheme is added to an individual’s taxable income and taxed as per their tax rate.
Post Office Monthly Income Scheme
India Post’s Post Office Monthly Income Scheme or POMIS is a popular type of investment option and a preferred way of investing money for monthly returns. This plan is backed by the government, making it a great choice to park money into for risk-averse individuals who wish to have a consistent and regular flow of income. Notably, the deposit period for the POMIS is 5 years and individuals can park up to Rs 4,50,000 in it. However, in the case of a joint account, individuals can invest a maximum of Rs 9,00,000 in it. Individuals can start investing in this monthly investment option with as little as Rs 1,500. On maturity, individuals have the option to reinvest the money for another 5 years. Individuals can also explore savings schemes like the National Pension Scheme to mobilize savings and avail of tax deductions under Section 80CCD.
Government Bonds
The primary goal behind the issuance of government bonds is to raise substantial funds from the public to support government spending. Risk-averse investors find government bonds to be a great low-risk investing option. Typically, these bonds come with maturities ranging from 5 years to 40 years. The long-term government bonds pay monthly interest or offer coupon payouts set by the government to the bondholders. Notably, these bonds come with a fixed maturity date.
Corporate Deposits
Corporate deposits are readily available across a wide range of non-banking financial firms and housing finance businesses in India. These investment plans are comparable to traditional bank deposits where individuals invest money in a corporate organization. However, corporate deposits are not considered to be as safe as typical bank deposits or fixed deposits. Usually, corporate deposits offer high interest rates to accountholders and extend additional flexibility that is not available to bank deposit holders. Regardless, individuals should investigate their choice of NBFCs’ financial health and market reputation before parking money in corporate deposits.
Monthly Income Plans
It is essentially a fund mutual fund that parks money primarily in fixed-income options and a part of the resources in equity and equity-oriented securities. The balanced approach towards investing makes it one of the best investment options. The fund pays the investor a steady income regularly. However, the returns are not fixed and heavily depend on the fund’s performance. This means that the returns on investment are not guaranteed as the same depends on the mutual fund’s performance. In addition, there’s a possibility of generating negative returns. This is why before parking money in a monthly income plan, individuals should examine their risk tolerance level. Notably, monthly income plans are available in growth and dividend options, but dividends are only paid in case of profits.
Life Insurance with Saving
An insurance policy that generates a guaranteed income is considered one of the best investment options for generating a steady monthly income. Notably, these investment cum insurance options offer investors the option of availing of predetermined monthly income once the plan reaches its maturity. Indeed, life insurance safety coupled with savings aspect is a lucrative means to generate substantial returns for life after retirement while guaranteeing the financial safety of one’s family.
Systematic Plans
The financial need of every individual tends to vary from one another. This is why, every investor tends to offer a unique investment plan that caters to their specific need and helps meet their requirements.
Notably, some investors choose to invest in a lump sum at a time, while others prefer to stagger investments and opt for a systematic investment plan. This also depends on how some investors seek capital growth, and others want to create a regular flow of income from investments. Notably, a Systematic Withdrawal Plan is offered by fund houses to enable individuals to meet their varying expectations. It allows individuals to withdraw a pre-fixed amount of money from their invested amount at fixed intervals, creating a stream of income.
Equity Share Dividends
These lucrative options offer investors high monthly dividends and allow long-term capital appreciation, but the extent of the same depends on the market performance of the companies in whose shares one puts their money into. To avail of the tempting payments, individuals need to invest in diverse stocks, even those that might not offer regular or substantial dividends. Notably, these investment option exposes individuals to higher than regular volatility. This exposes individuals’ capital to risks as both their earnings and capital are exposed to market risks. Notably, the monthly dividends are dependent on profits, which means during a company’s bad year there may not be any returns or dividends. However, to mitigate the associated risk, individuals are suggested to diversify their portfolio across different asset classes and opt for a balanced approach towards investments.
These are some of the best investment options for monthly income that help individuals appreciate their capital and meet their financial goals.
