Everyone loves a steady monthly income. Even if you do not belong to the salaried class, there are investments that can fetch you a fixed income every month. Some prefer guaranteed income plans, while some choose market-linked plans. For those with disposable income, investing in monthly income schemes that offer steady returns would make sense. This blog post will discuss some of the best investments for monthly income in India.
What is a monthly income plan?
The goal of a monthly income plan (MIP) is to generate cash flows and protect capital. It does this by investing primarily in debt and stock assets. An MIP is meant to give you a steady flow of money in the form of earnings and interest. People who are retired and may not have other means of monthly income could benefit from it.
Overview of the top 10 best investment plans for monthly income in 2024
Putting money into the best investment plan for monthly income is an excellent idea if you have cash in hand. This will ensure that your idle cash would start earning returns.
Government bonds
Government issues bonds to the public to raise money for development works like building infrastructure. Government bonds are ideal for risk-averse buyers. The maturity period of these bonds ranges between 5 to 40 years. These bonds pay periodic interest payments called coupon payments or interest payments. Government bonds have a set date when they are due for payout.
Real estate investments
Real estate is considered a liquid asset. Real estate assets such as shops, houses, and office space can provide you with a regular rental income. If you don’t have the money to invest in such properties, investing in real estate investment trusts (REITs) can help you generate steady income. REITs manage high-value properties and earn rental income from them. Shareholders in REITs get to earn income and dividends from their investments.  Â
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
PMVVY is a combination of an insurance policy and a pension plan that is meant for senior citizens. The scheme fetches an interest rate of about 8%, provides senior citizens with a steady income, and is one of the best investments for monthly income in India. The insurance runs for 10 years, depending on the payment method the subscriber chooses. Once the coverage term is over, the income is paid out once a month, three times a year, six times a year, or once a year.
Post Office Monthly Income Scheme (PO-MIS)
The Post Office Monthly Income Scheme offered by the Department of Posts on behalf of the government of India is a guaranteed return plan. POMIS provides subscribers with a set and assured monthly income. As an individual, you can invest up to Rs. 9 lakh in POMIS, while joint account holders can invest up to Rs. 15 lakhs. The maturity period of the scheme is five years.Â
Mutual Fund Monthly Income Plans
The mutual fund scheme called the Mutual Fund Monthly Income Plan (MIP) aims to give owners a steady income. It is considered the best investment plan for monthly income as it generates profits through capital gains. To achieve income and growth goals, these plans usually invest in a mix of debt and stock assets. Here, you have the option to receive the profit from your investments in the mutual fund at regular intervals.
Senior Citizens Savings Scheme
The government of India launched the Senior Citizens Savings Scheme in 2004 to provide those in their sunset years an assured flow of money. Twenty years later, the SCSS is still one of the most popular ways for seniors to deposit their money and earn a steady income. The scheme mostly invests its corpus in government debt securities. This means that your initial investment is safe, and you are assured of your returns.
Equity Share Dividends
The stock market-related option offers steady income and long-term capital gains. To get a high monthly dividend payment, you need to have a portfolio of different stocks. However, the challenge here is to identify companies that pay regular dividends.
Systematic Withdrawal Plans (SWP)
Systematic Withdrawal Plans (SWPs) are a type of investment strategy that ULIP plans, mutual funds, and other best investment plans often offer. They let you take out a set or varying amount of money from the investment on a daily basis. The goal of an SWP is to give you a steady flow of cash while protecting your investment.
Annuity Plans
Annuity plans are types of investments that give people a steady stream of income through regular payments. With an annuity plan, you can be sure of a steady monthly income that will help you meet your financial needs. As a viable alternative to a pension, you can consider this as one of the best investments for monthly income in India.
Corporate Fixed Deposits
Regular monthly income through bank fixed deposits is probably the easiest way to save money. However, corporate deposits or company fixed deposits offered by non-banking financial companies and corporates are generally preferred by investors as they provide a higher rate of interest. However, investors would do well to do some research on the company’s credit rating and repayment history before parking their hard-earned money in these products.
Performance of the top 10 investment plans for monthly income
We have discussed the top 10 investment plans for monthly income in India that you can consider. As you can see, there is no one-size-fits-all product that meets all your investment goals. While some government-run schemes offer guaranteed returns at minimal risk, the returns are not tax-free. Equity-related options can fetch you higher, inflation-adjusted returns, but all the same, returns are subject to market risks. Striking the right balance between returns and risk is key to picking the best investment for monthly income in India.
A regular income plan is essential for a family as it gives them a steady amount of money. If you don’t have a regular salary after retirement, these monthly payouts can help you pay your bills and maintain your standard of living. You can choose from some of the best monthly income schemes to secure your family’s future when you are not around. Nevertheless, some of the best investments for monthly income in India can also provide you with significant tax breaks.
Why should you invest in a monthly income plan?
Understanding the benefits of the best investments for monthly income in India is essential because each plan is created with a specific investor in mind. People who have a steady monthly paycheck and a job should put their money into plans that focus on growth and capital gain. However, if they want to meet their current financial needs after retirement, they might also want to invest in schemes that give them regular returns.
Investments made to make money are very different from those made to increase their value. Most buyers might not like income-generating plans because they don’t give significant returns, but they do guarantee a steady income.
Factors to consider before investing in the best investment plan for monthly income
Now that you are familiar with some of the best investments for monthly income in India, let’s understand some factors to consider before investing in these monthly income schemes.
Interest rates
The best investment plans that pay interest every month depend on the prevailing rates in the economy. For example, these investments are likely to give better returns when interest rates are high and lower returns when they are low. To avoid losing money, always check the interest rates in the economy before putting money into a regular income plan.
Know the risks involved
However, not every investment that gives monthly payouts is risky. Some of them have no risk because they are government-backed. Mutual funds and other assets that are tied to the stock market, on the other hand, are risky. It would help if you invest in a plan that fits your level of risk tolerance and risk profile.
Lock-in period
Some plans give you a regular income, but there are times when you can’t get your money out. At the same time, some schemes charge a fee for premature withdrawal. Be aware of some of these conditions before you choose the scheme for investment.
What is the importance of a monthly income generation plan?
A regular monthly income plan will ensure peace of mind even if something unexpected happens. For example, if you have a severe illness or meet with an accident, a steady income stream can help you get through those tough times.
You can handle most situations if you have the option of getting a monthly payment other than your regular salary. Some monthly income plans also include life insurance as part of the package. This ensures that if something terrible happens to you, your family will get a fixed sum to help them through the hard times.
Conclusion
Finding the best investment for monthly income in India that will give you a monthly income is not as difficult as you might think. Before putting money into any of these schemes, you should analyze the pros and cons of each.
