Introduction:
Securing a consistent monthly income is a common financial goal for many individuals, especially those who are nearing their retirement or are already retired. In today's volatile economic environment, exploring financial options that can provide you with a steady income stream while maintaining a balanced risk-reward proposition is essential.
This blog post explores the best monthly income investment plans in India. If you have surplus cash, you can invest in these schemes to secure a regular monthly income during the golden years of your life. Keep reading.
Top monthly income investment plans in India
Here are your best picks for monthly income investment plans in India in 2024:
1. Post Office Monthly Income Scheme
Backed by the Government of India, the Post Office Monthly Income Scheme (POMIS) is one of the most popular investment instruments in the country. It provides a fixed monthly income post-maturity, making it a favourite investment option among conservative investors.
You can deposit up to Rs. 4.5 lakh in a POMIS account, which comes with an initial tenure of five years. The deposit limit for joint accounts goes up to Rs. 9 lakhs. You can start by investing as low as Rs. 1,500 in your POMIS account. Your deposits will earn an interest at 7.4% per annum, payable annually. Upon maturity, you can choose to receive monthly income or to extend your deposit tenure by another five years.
2. Senior Citizen Savings Scheme (SCSS)
The Senior Citizen Savings Scheme (SCSS) is another popular investment option for those seeking a regular stream of income during their retirement years. This scheme is specifically designed to help senior citizens, i.e., those aged 60 or above, meet their living expenses after retirement. Like POMIS, SCSS is also backed by the Government of India.
If you are currently aged 60 or above, you can open an SCSS account with a bank or a post office. It allows you to deposit up to Rs. 15 lakhs for an initial tenure of five years, which can be extended by up to three years. Your deposits will attract an interest at the rate of 8.2% per annum, payable weekly.
3. Monthly Income Mutual Funds
Of late, mutual funds have emerged as one of the most popular investment vehicles for all types of investors. They allow you to invest according to your investment objectives and risk appetite. For example, you can choose between equity mutual funds – which invest predominantly in equities – and debt mutual funds – which invest a major portion of their corpus in debt-based instruments.
If you wish to generate a regular income, you can invest in monthly income mutual funds. These are typically debt-oriented mutual funds that invest a small portion in equities. They aim to provide regular income through dividends. By investing in such mutual funds, you can earn higher returns than traditional fixed-income investment instruments.
4. Pradhan Mantri Vaya Vandana Yojana (PMVVY)
The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-backed, fixed-income generating investment scheme designed to provide financial security to senior citizens after their retirement. It is one of the best investment options for monthly income in India.
The PMVVY scheme provides you with a stable income during your twilight years through fixed interest rates starting at 7.4% per annum. The policy has a term of 10 years, and depending on the payment mode chosen by the pensioner, the annuity is paid monthly, quarterly, half-yearly, or annually at the end of the policy term.
5. Equity shares with dividends
Believe it or not, investing in the stocks of certain companies can also help you secure a regular income stream. This investment option promises consistent income in the form of dividends along with potential capital gains. However, the risk level is very high. You can create a diversified portfolio of various stocks with a history of paying regular dividends. Make sure to check the issuing company’s fundamentals before investing.
To conclude
These are the best investment options for fixed income in India. Choosing the right monthly income investment plan depends on your risk tolerance, financial goals, and investment horizon. While government-backed schemes like POMIS and SCSS offer high safety and fixed returns, options like mutual funds and equities provide the potential for higher returns with moderate risk.
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