Which is the best monthly income plan?

best monthly income plan

Investments are characterized by their ability to generate returns. The returns are generally in the form of interest or dividends. An investor can opt for monthly or quarterly interest payments. Alternatively, the investor can go for compound interest and earn cumulative interest. But, this blog discusses cases where the investor seeks monthly income. So, we restrict our discussion to monthly income plans alone.

Various monthly income plans are available, such as Atal Pension Yojana, Post Office Monthly Interest Scheme, Pradhan Mantri Vaya Vandana Yojana, Bank Monthly Interest FD, etc. The Post Office Senior Citizen Savings Scheme is also a good option, but the returns are quarterly. Other pension plans include LIC Jeevan Akshay, LIC Jeevan Shanti, etc.  

Let us briefly discuss some of these plans to understand the best monthly plan for investors. Since senior citizens are eligible to get a higher interest rate, we shall consider the examples of investments made by senior citizens.

Here is a tabular description that provides a gist of our discussion.

For simplicity purposes, we shall assume an investment of Rs 1 lakh. However, for the PMVVY, the minimum investment is Rs 1.50 lakhs.

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Name of the Scheme

Interest Rate

Monthly Return

Pradhan Mantri Vaya Vandana Yojana

7.4%

Minimum Rs 1000

Post Office Monthly Interest Scheme

6.6%

Rs 547

Bank Monthly Interest FD

3% to 7%

Rs 249 to Rs 580

Atal Pension Yojana

As per scheme

Minimum Rs 1000

LIC Jeevan Akshay

As per scheme

Minimum Rs 1000

LIC Jeevan Shanti

As per scheme

Minimum Rs 1000

  • A

    Pradhan Mantri Vaya Vandana Yojana

    The PMVVY is a retirement benefit cum pension plan available for people over 60 years. The scheme launched by the LIC of India is open up to March 31, 2023. The maturity tenure is ten years. The minimum investment amount is Rs 1.50 lakhs, whereas the maximum is Rs 15 lakhs. Presently, the interest rate is 7.40%.
    The returns are available monthly, with a minimum pension of Rs 1000 (on investing Rs 162162), and the maximum is Rs 9250 (investment Rs 15 lakhs). In addition, the investor can opt for quarterly, half-yearly, or annual returns...

  • B

    Post Office Monthly Interest Scheme

    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 of 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. .

  • C

    Bank Monthly Interest Deposit Scheme

    Like POMIS, banks offer schemes for paying monthly interest on fixed deposits. The difference is that there is no maximum amount. However, the interest rate can vary from one bank to the other. It also depends on the tenure and the deposit amount. Generally, deposit amounts above Rs 2 crores have a different interest structure.
    The interest rate is between 3% and 7% per annum. So, the monthly return can vary from Rs 249 to Rs 580 per lakh.. .

  • D

    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.

  • E

    LIC Jeevan Akshay

    LIC Jeevan Akshay, a single premium annuity plan, has a minimum investment of Rs 100000, with a minimum annuity of Rs 1000 per month. The program offers ten annuity options. The scheme is open to individuals between 30 and 80 years. The pension is payable throughout the policy holder's life. The best aspect of this scheme is that it guarantees the annuity rates at the policy's inception. This scheme also allows joint life cover.

  • F

    LIC Jeevan Shanti

    LIC Jeevan Shanti is similar to LIC Jeevan Akshay as it is also a single premium plan. This plan allows the policyholder to choose between single and joint-life annuity. Individuals between 30 and 79 can purchase the program with a minimum investment of Rs 1.50 lakhs. The minimum allowance payable is Rs 1000 per month. Death benefit options are available under Jeevan Shanti.

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Final Thoughts

We have discussed six safe avenues for generating monthly returns. However, each scheme has its benefits and drawbacks. Hence, we leave the decision of the best investment option to the individual investor.

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