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Best Investment Plan for Continuous Monthly Income

Have you ever considered what your source of income would be if your regular income stream were to experience deceleration due to a misfortune? People believe that term insurance will fulfil their needs. But the money is paid out to the beneficiaries only in case of death of the life Insured, as a fixed monthly income over a period of time.

A monthly income plan is a mutual fund strategy that invests in equity and debt assets to generate income flows while preserving capital. Its goal has been to generate a consistent income stream in the form of dividends and interest payments. As a result, it is usually one of the best investment plans for monthly income for retirees or older adults who do not have other options.

It is the ideal option for those who require a steady source of money as a backup. After a few years of paying the premium, a plan in which an individual receives a set amount of money every month accrues.

Monthly Income Plan (MIP)

Monthly income plans (MIPs) are mutual funds that invest primarily in fixed income and money market instruments and a minor percentage of their assets in equity and equity-related securities. The fund firms pay out a consistent income to their investors regularly. However, since it’s a market- linked product, this sum is not fixed and is determined by the fund's performance. It is not assured because mutual fund performance influences the returns.

There is also the possibility of negative returns. As a result, you must assess your risk profile before electing to invest in a best investment plan for monthly income. Monthly income plans come in two types: growth and dividends.

  • Monthly income plan with a growth component

    Earnings on the capital are added to the invested amount in this plan. Money is not paid out to the investor at periodic intervals. It allows for the generation of riches as well as the expansion of the investor's assets.
  • Dividend-oriented monthly investment plan

    These plans generate dividends as part of their earnings. Individual dividends are not subject to taxation. Dividends are paid from the AMC's distributable surplus when the fund makes a profit in the market.

Monthly Income Scheme at the Post Office

Because the government backs it, it is an ideal investment option for risk-averse individuals searching for a steady income stream. It is currently offering monthly income scheme interest rate of 6.6 per cent per annum. The deposit period for this scheme is five years. Individual accounts can invest up to Rs 4,50,000, while joint accounts can contribute up to Rs 9,00,000. This MIS allows you to start investing as little as Rs 1,500. When the investment matures, it can be re-invested for a second five-year period.

Bonds Issued by the Government

For risk-averse investors, government bonds are a great low-risk investing alternative. currently Government bonds are available to invest up to 40 years of maturity. Government bonds pay regular interest or offer coupon payments that the Indian government determines. Bonds issued by the government have a set maturity date. The primary goal of government bond issuance is to raise funds for infrastructure development.

Deposits Made by Corporations

Corporate deposits are available from a variety of non-banking financial firms and housing finance businesses. These are comparable to bank deposits, except that you invest with a corporation, which is less secure than a bank deposit. Corporate deposits pay a high interest rate as compared to bank deposits. You should evaluate the NBFC's financial strength and reliability before investing in corporate deposits. You can refer to the CRISIL ratings to help you with this.

Senior Citizen Savings Scheme

A senior citizen savings plan (SCSS) is an excellent investment choice if you are a senior citizen. The government backs it, and only senior citizens over 60 are permitted to invest. This scheme is available at notified bank branches and post offices. However, you must enrol in the plan within one month of retirement. SCSS offers an annual interest rate of 7.4 per cent, which can be paid weekly for five years. The SCSS allows you to invest a maximum of Rs 15 lakh, or your retirement corpus, whichever is less. The interest from the program, on the other hand, is added to your taxable income and taxed according to your tax rate.

Picking the correct monthly income deposit scheme will help you and your family in the long run. So, now that you are aware of the best investment plan for monthly income, ensure you pick the right finest option for you.

Disclaimer:

Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.

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