We undoubtedly require a monthly income, isn’t that right? However, investing money you have in schemes that offer reliable monthly income is a fantastic choice if you have a sizeable amount of extra cash. This ensures that the idle money in your account starts to generate dividends or profits. In this blog, we have put together a list of the top income plans that can help you generate monthly income.
A monthly income plan, as the name suggests, is a scheme where the individual receives a certain sum of money every month. Here are seven awesome monthly income schemes that you can invest in this year!
Earn Return on Your Investment at Regular Intervals like Daily, 3 days Or 15 days
Importance Of Monthly Income Schemes
Since different schemes are designed with different investor types’ wishes and requirements in mind, it is essential to understand the advantages associated with various types of investment plans. People who are employed and have a regular monthly salary should invest in programmes that emphasize growth and capital appreciation tactics.
However, one would also want to participate in schemes that offer monthly returns in order to meet their immediate financial demands after retirement.
The portfolio of assets for generating income and the portfolio of investments for capital growth are extremely different. Although income-generating investments may not be favoured by the vast majority of investors because they do not yield high returns, they do guarantee a consistent income in the future.
Best Guaranteed Monthly Income Plans
Banks and financial institutions provide Fixed Deposit with monthly payout option. Such a monthly income scheme allows you to enjoy added flexibility of monthly payout. You may spread your funds in various banks for making the most of your monthly income scheme. Fixed Deposits with monthly payout option is the best guaranteed monthly income plan recommended for pensioners or senior citizens as the interest earned monthly can be another source of income for them.
Earn Around 10-20% Return On Your Investment
In addition to mutual funds, you can purchase insurance products that guarantee monthly returns. The insured amount might be paid out under these plans in one lump sum or as a monthly income, which are both standard insurance products.
Typically, the monthly payment begins on the day the premium payment concludes. Here, unlike in other monthly income schemes, policyholders are not required to make lump sum investments. On the other hand, people can begin investing when they are young. Naturally, the premiums are cheaper if you start sooner. The insurance coverage offered throughout the term is an advantage of these programmes.
A chit fund is a rotating saving scheme, also known as chitty, chit or kuree is a good monthly income scheme. It is an excellent financial instrument that serves as a savings as well as a borrowing tool. As a saving scheme, the chit fund offers good returns on investment. As a borrowing tool, it serves as a reliable source of funds in emergencies or whenever the need for money arises. In a chit fund scheme, a group of people come together to contribute a fixed amount of money every month of a fixed period. The chit fund interest rate is 3-4 times more than the returns from bank FDs and RDs. You can earn 10%-15% interest p.a. in a chit fund scheme as compared to 3%-6% p.a. interest given by banks. The Money Club is one such AI driven chit fund platform with more than 4 lakh satisfied customers.
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Earn 3 To 4 Times More Than Bank Fixed Deposits With The Money Club
The best monthly income plan to produce monthly returns is mutual funds. It is possible to invest in debt and money market instruments through a number of mutual fund schemes. The most suitable instruments for generating consistent monthly returns are hybrid funds, which invest money in a well-balanced combination of debt and equities to provide the best possible risk and return profiles. The mutual funds listed below produce decent monthly returns.
- SBI Debt Hybrid Fund – 25% investment in equity and 75% in debt and money market instruments
- 2.ICICI Prudential Regular Savings Fund – 13.92% investment in equity and 77.41% in debt and low-risk securities
- 3.Reliance Hybrid Bond Fund – 12% investment in large and mid-cap stocks and 83% in debt and low-risk securities
Regular Pension Plans
Pension plans are the best guaranteed monthly income plans. There are standard pension plans available, where investors can make a single sum investment or a series of monthly investments over time. The pension quantum can be chosen by the investor when investing in these pension schemes. The investment amount works out accordingly.
For instance, the Atal Pension Yojana mandates that participants make the investment over the course of 12, 36, or 84 months. The minimum starting age is 18 and the highest starting age is 40. Up until the investor turns 60 years old, the acquisition will continue. They then start getting the calculated pension amount. Additionally, this plan gives the investor the option to convert the monthly annuity into a single lump sum payout. The pension payment starts at Rs. 1000 and rises by Rs. 1000 every two years, reaching Rs. 5000.
In contrast, the Pradhan Mantri Vaya Vandana Yojana seeks a lump sum investment of Rs 1.50 lakhs and a maximum of Rs 15 lakhs for ten years. This investment plan is available for senior citizens alone. Depending on their investment, they get a monthly pension between Rs 1000 and Rs 9250.
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Post Office Monthly Income Schemes
Post office monthly income schemes are the guaranteed monthly income schemes. Anyone can invest in the POMIS, a monthly interest-earning scheme available at all post offices in India. The minimum investment is Rs 1000 and the maximum is Rs 4.50 lakhs. If you have a joint account, the investment can go up to Rs 9.00 lakhs. Presently, the interest rate is Rs 6.60%. So the monthly income is Rs 547 per lakh.
Bank Monthly Interest Deposit Scheme
Banks provide programmes for paying fixed deposit interest on a monthly basis, similar to POMIS. The distinction is that there isn’t a cap on the quantity. Nevertheless, the interest rate may differ from one bank to the next. In addition, the duration and deposit sum must be considered. A distinct interest structure typically applies to deposits beyond Rs 2 crores. The interest rate ranges from 3% to 7% annually. As a result, the monthly return can range between Rs 249 and Rs 580 per lakh.
Senior Citizen Saving Scheme
If you are senior and want to invest, a senior citizen savings plan (SCSS) is a great monthly income scheme. Only those who are elderly (over 60) are allowed to invest in it because it is backed by the government.
Some post offices and bank branches offer this service. After retiring, you have one month to join the plan. A 7.4% annual interest rate, payable weekly, is what SCSS is providing. It is in effect for a period of five years. You can invest up to Rs 15 lakh through the SCSS. On the other hand, the scheme’s interest is added to your taxable income and is then taxed at your current tax rate. It is the best guaranteed monthly income plan for senior citizens.
Atal Pension Yojana
Atal Pension Yojana is different from the schemes discussed above because it requires building up a corpus for 42 years (minimum of 20 years). An individual between 18 and 40 can invest in the Atal Pension Yojana. The depositor can choose the monthly pension receivable amount from Rs 1000 to Rs 5000 (in increments of Rs 1000 each). Accordingly, the investment amount varies. The depositor starts getting the pre-decided pension amount on attaining 60 years.
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Systematic Withdrawal Plans
Each person has distinct financial needs. Because of this, each investor has a different investment strategy, which can be your best monthly income plan.
While some investors like making a single, large sum, others prefer to spread out their investments and adopt a systematic investment strategy (SIP). While some investors aim for financial growth, others desire consistent returns on their assets.
Fund houses offer a variety of tools and facilities to fulfill the needs of various sorts of investors. A Systematic Withdrawal Plan is one of these resources (SWP).
It’s not as difficult as you might think to find the best guaranteed monthly income plan in India for monthly income. However, you must research the advantages and how they might benefit you before investing in any of these schemes. You must determine which plan would best serve the varied financial objectives of different people.