Best investment for monthly income in India
Having an investment plan for monthly income holds significant importance in our financial lives. Having surplus funds offers a valuable opportunity to allocate them to programs that yield consistent monthly returns. This ensures that your idle capital starts generating dividends or profits. Utilising a SIP calculator or lumpsum calculator can aid in strategising the best investment plan for monthly income in India, leveraging surplus funds to generate consistent returns and secure financial stability in 2024.
If you're pondering how to secure monthly income through the best investment plan for monthly income in India, this article is tailored for you. Here, we present some of the best monthly income scheme investment options for generating regular income in India for the year 2024.
Best monthly income plans you should consider
Monthly Income Plan | Minimum period of investment | Rate of returns | Investment amount | Risk | Tax benefits |
ULIP Plans | 5 years | 9 - 12% p.a. | Rs. 1,000 - no limit | Medium to high | Available u/ Section 80 C and Section 10 (10D) of the IT Act, 1961 |
Annuity Plans | varies | 7 - 10% | Generally, Rs. 10,000 - no limit | Low to medium | Available u/ Section 80 C and Section 10 (10D) of the IT Act, 1961 |
Post office monthly income (POMIS) | 5 years | 7.4% p.a. | Single Life : Rs. 1000 - Rs. 9 lakhs; Joint Life Rs. 1000 - Rs. 15 lakhs | Nil to low risk | Nil |
Senior Citizen Saving Scheme (SCSS) | 5 years (can extend by 3 years) | 8.2% p.a. | Rs. 1000- Rs 30 lakhs | Nil | Available u/ Section 80 C of the IT Act. 1961 |
Pradhan Mantri Vaya Vandana Yojana (PMVVY) | 10 years | 7.4% p.a. | Rs. 1,56,658 - Rs. 15 lakhs | Low - risk | Nil |
Systematic Withdrawal Plans (SWPs) | 5 - 40 years | 7-13% | Generally - Rs. 500 - no limit | Medium - high risk | Depends on the plan |
Long-Term Government Bonds | 10 yaers or more | 6-9% | Rs. 10,000 - no limit | Low risk | Available u/ Section 80 10(10D) and Sec 80CCF of the IT Act, 1961 |
Mutual Fund Monthly Income Plans | ELSS Funds : 3 years | 8-15% | Generally, Rs. 500 - no limit | Medium risk | Tax Benefits on ELSS investments u/ Sec 80C of the IT Act, 1961 |
Equity Share Dividends | varies | As per the market performance of underlying asset | Varies from company to company | High risk | Tax benefits up to Rs. 1.5 lakhs on ELSS dividends |
Factors to consider before investing in monthly income schemes
- Before investing in any of the mentioned best monthly income scheme, individuals must assess the current state of the market.
- Seasoned investors often favour the best monthly income scheme during periods of high-interest rates, as higher rates lead to a decrease in net asset value.
- It's crucial for individuals to exercise caution when selecting a specific scheme, given the abundance of best investment plans for monthly income available in today's market.
- Those considering investments in Monthly Income Plans should first evaluate their own needs and requirements as investors.
- Conducting thorough research allows for a comparison of the scope, offerings, and performance of different best monthly income schemes for 2024.
- This comprehensive approach aids in understanding which type of scheme aligns best with individual goals and how to effectively leverage it.
Best income plans of 2024 in detail Senior Citizen Saving Scheme (SCSS)
The Senior Citizen Saving Scheme (SCSS) stands out as a secure investment avenue exclusively tailored for senior citizens aged 60 and above. Governed by the government and accessible through select bank branches and post offices, SCSS offers an attractive annual interest rate of 8.2%, disbursed weekly, over a five-year tenure. Investors can allocate up to Rs 15 lakh into this scheme. However, it's important to note that the interest earned is subject to taxation based on the investor's applicable tax rate based on income tax slabs of FY 2024-25.
Post Office Monthly Income Scheme (POMIS)
Backed by the government, the Post Office Monthly Income Scheme (POMIS) presents a dependable investment choice for risk-averse individuals seeking regular income streams. With an annual interest rate of 7.4%, payable on a monthly basis, and a deposit period of five years, POMIS allows single investors to contribute up to Rs 4,50,000, while joint account holders can invest up to Rs 9,00,000. Starting with a minimum investment of Rs 1,500, investors can reinvest upon maturity for an additional five years.
Long-Term Government Bonds
For investors seeking low-risk options, long-term government bonds serve as a viable choice. Offering maturities ranging from 5 to 40 years, these bonds provide monthly interest payments or coupon payments set by the Indian government, with the primary aim of raising funds for government expenditure.
Corporate Deposits
Corporate deposits, offered by various non-banking financial firms (NBFCs) and housing finance companies (HFCs), offer higher interest rates compared to traditional bank deposits but entail higher risk. Before investing, thorough due diligence on the financial health and reputation of the NBFCs is essential to mitigate risks.
Monthly Income Plans (MIPs)
Monthly Income Plans (MIPs) are mutual funds primarily invested in fixed income instruments with a minor equity exposure, designed to provide investors with regular income. The income distribution is contingent upon the fund's performance, with options for growth and dividend plans. Investors must assess their risk tolerance before considering MIP investments.
Pradhan Mantri Vaya Vandana Yojana
Catering specifically to senior citizens, the Pradhan Mantri Vaya Vandana Yojana offers financial security post-retirement. With fixed interest rates starting from 7.4% annually, and policy terms extending up to 10 years, pensioners can opt for monthly, quarterly, half-yearly, or yearly annuity payouts upon policy maturity.
Life Insurance Plus Saving
Guaranteed income insurance policies combined life insurance coverage with savings, ensuring a predetermined monthly payout post-maturity. This option provides financial stability for retirees while securing their family's future.
Systematic Withdrawal Plans (SWPs)
Systematic Withdrawal Plans (SWPs) cater to investors' diverse financial needs by offering a structured approach to withdrawals. Investors can customise their investment strategies based on individual requirements, whether seeking capital growth or regular income.
Equity Share Dividends
While offering the potential for consistent income and long-term gains, equity share dividends entail higher risk levels. Diversifying portfolios with multiple stocks is crucial to maintain a high dividend payout ratio and mitigate risks associated with companies that don't regularly distribute dividends.
Annuity Plans
Providing a steady income with relatively lower risk, annuity plans are offered by Indian insurance companies and serve as effective retirement tools. Investors can choose between deferred and immediate annuities based on their preference for receiving regular income either immediately or after a specified period.
Despite the benefits, it's essential to consider the associated fees, tax implications, and risks before investing in annuities with these investment plans for monthly income.
What is the importance of a monthly income generation plan?
Understanding the benefits associated with various best monthly income schemes is crucial, as different schemes are tailored to meet the diverse needs and preferences of investors. For individuals with stable monthly income from employment, prioritising capital appreciation and growth-oriented strategies in their investment plans is advisable.
However, it's also important to consider the best investment plan for monthly income programs that offer monthly returns to fulfil immediate financial needs post-retirement. The investment portfolio designed for income generation significantly differs from that aimed at capital appreciation. While income-generating schemes may not yield high returns favoured by many investors, they offer the assurance of a steady income stream in the future.
The passive income generated by the best investment plan for monthly income contributes to financial independence, underscoring their fundamental significance.
Conclusion
Finding the right best monthly income schemes in India to generate monthly income may seem daunting, but it's actually quite achievable with proper research and understanding of the potential benefits. By thoroughly exploring the investment plans for monthly income investment options, individuals can align their financial goals with suitable avenues. It's important to consider factors like risk tolerance, investment horizon, and personal objectives when evaluating these opportunities. Take the time to assess how each plan caters to your specific needs and preferences to make well-informed decisions about your investments.
For those seeking a diverse range of options, platforms like Bajaj Finserv Mutual Fund Platform offer access to over 1000 mutual funds, providing ample choices to tailor investments according to individual requirements. Comparing mutual funds offers investors a wide array of options to explore various strategies and fund types, allowing them to construct a diversified portfolio tailored to their income objectives. By carefully evaluating factors such as fund performance, expense ratios, investment styles, and risk profiles, investors can select funds that align with their financial goals and risk tolerance. However, making informed decisions requires diligent research and, when needed, seeking guidance from financial experts. With prudent investment planning, investors can secure a stable source of monthly income and work towards achieving their financial aspirations.
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