Smart investment planning decides how much wealth you will create in the future. It usually depends on the financial objectives of life. People invest money in different financial schemes to earn monthly income from investments in India.
Financial security holds great significance, and failing to supplement income can lead to monetary instability within a household. Individuals need to assess their standard of living and make investments accordingly, ensuring they can sustain their lifestyle even during unexpected financial challenges.
A steady monthly income is of utmost importance as it ensures meeting daily expenses and safeguards the household’s well-being during difficult times. Income-generating investment schemes provide financial stability and enhance liquidity with promising returns. Additionally, having a secondary source of income opens doors to exploring more investment opportunities, effectively building wealth and securing a level of financial freedom.
As various plans are available for investors who wish to get a monthly income, it is essential to understand all the options before investing. You must focus on how much monthly returns the scheme is providing you and if it is fulfilling your goals. Also, make sure that the plan offers good capital growth in the long term. Here, we will discuss how to get monthly income from investments in India.
Also read: 10 Ways To Save Money On A Low Income
10 Ways You Can Earn Monthly Income from Investment in India
You will find various ways to invest in India to get monthly income; here, we have listed the top 10 options where you can earn monthly income from investments in India:
1. Mutual Funds with Monthly Income Plans (MIPs)
Under the MIPs, the investors use debt instruments to invest, and the accumulated interest is periodically distributed among the investors. MIPs are decent options to get monthly income from investments in India because these are less risky than equity funds. These are best suited for those investors who wish to invest for the short term.
2. Monthly Income Fixed Deposits Schemes
A monthly income scheme with a fixed deposit is one of the great options for income from investments in India. It is best for investors looking forward to earning regular and fixed income at a specific interest rate. You can open an FD for up to 10 years, and it also allows you premature withdrawal.
3. Post Office Senior Citizen Savings Scheme (SCSS)
If you are 60 years old and looking forward to monthly income from investments in India, SCSS is your best option. However, people 55 years of age are also eligible if they are retiring voluntarily. This scheme offers an 8.7% rate of interest every quarter. The Minimum investment required is Rs. 1000, and the maximum investment can be Rs. 15 lakhs. Additionally, the investment under Post office senior citizen saving scheme comes under tax exemption according to Section 80C of the Income Tax Act.
4. Stocks That Pays Dividend
Investing in stocks is the most fascinating tool for monthly income from investments in India. However, not every stock provides a monthly income, so you must be careful while investing. You must look for stocks that pay regular dividends every month.
5. Life insurance plus saving
A guaranteed return insurance policy is an excellent opportunity for monthly income in India through investment. It offers monthly payouts after the maturity of the policy. Life insurance plus saving is the best way to secure your and your family’s future after your retirement.
A life insurance plan with an income option will help you tackle unforeseen situations and help secure your savings. Various life insurance plans offer monthly fixed income after maturity.
6. Company Deposits
These are the Ways to Get Monthly Income From Investment in India. Many Finance companies offer company deposits, such as Bajaj Finance, DHFL, PNB Housing, LIC Housing, etc. The interest rates range from 7% to 8.5% per annum. By considering the credit rating of these deposits, you can invest to earn a steady income.
7. Non – cumulative Bonds
Bonds that provide non-cumulative interest are an excellent opportunity to generate consistent income. In the case of non-cumulative bonds, instead of interest accumulation, it is paid to the investor regularly, such as monthly, quarterly, semi-annually, or annually. Usually, Non- cumulative bonds are high quality and issued by the Government of India.
If you are looking for an investment option that is customized for investors to earn monthly income from investments in India, you must opt for an Annuity. You can get the payout from 30 years of age, but people usually prefer to buy it during retirement. An annuity offers you a 7% rate of interest per annum.
9. Real Estate Investment Trust
The real estate investment trust is one of the tailor-made options for investors who wish to generate regular income. It is the safest and offers high returns on investment.
10. High-Interest Savings Account
While it may not be considered an income generator, I find it highly useful for its unique features. Let me explain why. Suppose your bank account offers the SWEEP facility. SWEEP automatically locks a particular portion of your funds into a Fixed Deposit (FD). This locked amount then starts earning a higher interest rate. The best part is that you can conveniently withdraw the swept amount using an ATM if needed. This way, your money works harder for you while remaining easily accessible whenever you require it.
Importance of Monthly Income from Investments in India
Before you invest in the various schemes for monthly income generations, you must know their benefits. Monthly income generation plans are the boons for people near their retirement. It enables them to get regular fixed monthly income and stay independent after retirement. However, you must decide on the investment option based on your financial goals and risk tolerance.
1. Meeting Living Expenses
Regular monthly income from investments in India ensures you can cover your daily living expenses, including housing, groceries, utilities, and other essential needs. It reduces reliance on a single source of income and fosters a sense of financial independence.
2. Retirement Planning
Monthly income from investments is essential in building a good retirement corpus. It allows people to create a sustainable income after retirement.
3. Tackling Inflation
In India, inflation can reduce the power of money to purchase stuff. Monthly income from investments in India helps cooperate with inflation by providing a consistent cash flow.
4. Emergency Fund
Having a steady monthly income from investments helps in building an emergency fund. This safety net provides financial support during unforeseen events like medical emergencies or job loss, preventing individuals from resorting to debt to cover such expenses.
5. Diversification of Income
Relying only on one income can be risky. Additional Monthly income from investments diversifies the source of income. It reduces vulnerability to economic fluctuations and uncertainties.
6. Fulfilling Goals and Dreams
Regular income from investments empowers you to fulfill your dream. It grants you the financial freedom to take calculated risks and achieve your goals.
7. Wealth Accumulation
A consistent monthly income from investments accelerates wealth accumulation over time. It allows individuals to reinvest surplus income, generating compounding returns and expanding their financial portfolio.
8. Tax Efficiency
Specific investment plans in India offer tax benefits. Individuals can optimize their tax liability and maximize their savings by utilizing such tax-free options.
9. Legacy Planning
A dependable monthly income ensures that individuals can provide for their loved ones even in their absence. It aids in creating a legacy and securing the financial future of family members.
10. Peace of Mind
Ultimately, having a reliable monthly income from investments instills peace of mind. It reduces financial stress and uncertainty, enabling individuals to focus on personal and professional growth.
Everyone has unique financial requirements and different investment capacities, but the desire for monthly income from investments in India is universal. Hence, selecting the right investment plan is essential to get regular returns on investment.
We have discussed the top 10 Ways to Get Monthly Income from Investment in India, which will help make informed decisions.
How To Get Monthly Income from Investments in India – FAQS
What is the investment required to receive ₹50,000 per month in India?
Ans. To achieve a monthly pension of ₹50,000, you must invest approximately ₹9,000 per month for 10-12 years in suitable plans. Alternatively, you can opt for guaranteed fixed-income plans after retirement, which carry lower risks, though the returns will depend on the invested amount and interest earned.
What is the monthly interest rate offered on a fixed deposit (FD)?
Ans. A monthly fixed deposit of ₹1 lakh typically earns an interest rate between 2.50% and 6.50%. At a 2.5% interest rate, the monthly interest would be around ₹200, whereas, at a 6.50% interest rate, it would be approximately ₹520.
Is real estate a sound investment?
Ans. Real estate investments generally offer returns that outpace inflation, providing real profits. Real estate can yield higher returns with relatively lower risk than riskier options like direct equities.
Are there any mutual funds that provide monthly income?
Ans. Yes, monthly income plans (MIP) are available as a type of mutual fund investment. These plans primarily allocate funds to debt and equity securities to generate regular cash flows while preserving capital.
Why is life insurance considered better than a mutual fund?
Ans. Life insurance involves lower risks than mutual funds, subject to market fluctuations. As long as premiums are paid on time and policy rules are followed, the policyholder’s nominee will receive a sum assured during settlement, providing greater financial security.