Best Investment Plan for Monthly Regular Income in India

Investing for a monthly income is a wise decision. It helps you grow your wealth and ensures financial security. With a variety of investment options available in the market, choosing the best investment plan for monthly income may be an intimidating task.

Investing in a monthly income plan is essential for anyone who wants to ensure a regular stream of income. Whether you are a salaried individual or a retiree, a monthly income plan can help you meet your financial goals by providing you with a steady flow of cash. 

In this article, we will guide you through the monthly income investment plans.

Best 10 Investment Plans for Monthly Income in 2023

Making regular investments for monthly income when you need it, is a good way to plan your retirement. However, you must choose carefully where you invest. In other words, you should find out the best investment for monthly income before you take a final call in this respect. Here are some of the best investments for monthly income. 

Fixed Deposits

Fixed deposits are one of the most popular investment options for generating a steady stream of income. Fixed deposits are offered by banks and non-banking financial institutions (NBFCs), and the interest rates on fixed deposits vary from 5% to 7%. The tenure for fixed deposits can range from 7 days to 10 years, and the interest rate depends on the tenure of the fixed deposit.

Fixed deposits are a low-risk investment option as they are not affected by market fluctuations. The interest rates on fixed deposits are fixed, and you can be assured of a fixed monthly income. However, the interest rates on fixed deposits are usually lower than other investment options, and the returns are taxable.

Monthly Income Plans

Monthly income plans are a type of mutual fund that invests in both equity and debt instruments. Monthly income plans are suitable for investors who are looking for a regular monthly income and want to invest in a low-risk investment option. The returns on monthly income plans are generated from both the interest on debt instruments and the dividends on equity instruments.

Monthly income plans offer a higher return than fixed deposits, and the returns are tax-efficient. The tenure for monthly income plans can range from 1 year to 5 years, and the returns on monthly income plans depend on the performance of the underlying assets.

Post Office Monthly Income Scheme

The Post Office Monthly Income Scheme (POMIS) is a government-backed investment option. It can be the right way of investing for a monthly income for many people. POMIS is a low-risk investment option as it is backed by the government, and the interest rate on POMIS is fixed at 6.6%. The tenure for POMIS is 5 years, and the interest on POMIS is payable monthly.

POMIS is an ideal investment option for retired individuals who are looking for a regular monthly income. However, the returns on POMIS are lower than other investment options, and the interest on POMIS is taxable.

Corporate Fixed Deposits

Corporate fixed deposits are fixed deposits that are issued by corporations and offer a higher interest rate than bank fixed deposits. Corporate fixed deposits are suitable for investors who are looking for a regular monthly income and want to invest in a low-risk investment option. The interest rate on corporate fixed deposits varies from 6% to 9%, and the tenure for corporate fixed deposits can range from 1 year to 5 years.

Corporate fixed deposits offer a higher return than bank fixed deposits, and the returns are tax-efficient. However, corporate fixed deposits are not as safe as bank fixed deposits as they are not backed by the government.

Systematic Withdrawal Plans

Systematic Withdrawal Plans (SWPs) are a type of mutual fund that provides a regular monthly income. SWPs are suitable for investors who have a lump sum amount to invest and want to generate a regular monthly income. The returns on SWPs are generated from the interest on debt instruments and the dividends on equity instruments.

The tenure for SWPs can range from 1 year to 5 years, and the returns on SWPs depend on the performance of the underlying assets. SWPs offer a higher return than fixed deposits, and the returns are tax-efficient.

Dividend Stocks

Dividend stocks are company stocks that pay out a portion of their earnings to shareholders in the form of dividends. These dividends can provide a steady stream of monthly income for investors. The amount of dividends paid out can vary, and some companies may pay out more than others. However, investing in dividend stocks can be a good way to generate a consistent monthly income, especially for those who are willing to take on some level of risk.

Real Estate Investment Trusts (REITs)

REITs are companies that own and manage income-producing real estate properties. They offer investors the opportunity to invest in real estate without having to buy and manage the properties themselves. REITs typically pay out a high percentage of their profits as dividends, which can provide a consistent monthly income for investors. Additionally, the value of the REIT's shares may appreciate over time, providing investors with potential capital gains.

Annuities

An annuity is a financial product that provides a guaranteed income stream for a set period of time or for life, depending on the type of annuity. Annuities are typically purchased from insurance companies and can provide a reliable source of monthly income for retirees or those looking to supplement their income. However, it's important to note that annuities can be complex and may come with fees and restrictions, so it's important to do your research before investing.

Peer-to-Peer Lending

Peer-to-peer lending is a relatively new investment option that allows individuals to lend money to others through online platforms. These platforms match borrowers with investors, and investors can earn monthly income in the form of interest payments on their loans. The interest rates on peer-to-peer loans can be higher than other fixed-income investments, but there is also a higher risk of default.

Bonds

Bonds are a type of fixed-income investment that pays investors interest on their investment. They are issued by corporations, municipalities, and the government, and can provide a reliable source of monthly income. However, the interest rates on bonds can vary and are influenced by factors such as inflation and interest rates. Additionally, bonds can be affected by market conditions and may come with fees and other costs.

When considering which investment plan is best for monthly income, it's important to consider your personal financial situation, risk tolerance, and investment goals. Working with a financial advisor can also help you determine the best investment options for your specific needs.

Conclusion

A monthly income plan is an essential investment tool that can help you achieve financial stability, mitigate risks, and plan for the future. By investing in a well-diversified portfolio of assets, you can ensure a regular stream of income that can provide you with the financial security and the peace of mind you need.

Disclaimer

The investment options and stocks mentioned here are not recommendations. Please go through your own due diligence and conduct thorough research before investing. Investment in the securities market is subject to market risks. Please read the Risk Disclosure documents carefully before investing. Past performance of instruments/securities does not indicate their future performance. Due to the price fluctuation risk and the market risk, there is no guarantee that your personal investment objectives will be achieved.