A bank Fixed Deposit (FD) is without a doubt one of the best and most low-risk income options. This scheme requires you to invest a set amount of money for a specified period. That set amount of money helps you to earn interest on a cumulative or periodic basis depending upon your choice.
Post Office Monthly Income Scheme (POMIS)
If you didn't know, our country's post offices offer various financial services and products, including Post Office Monthly Schemes. You can earn a consistent monthly income with this investment strategy, which has a 7.3 per cent return rate.
Government Bond (Long-Term)
Government bonds, especially long-term ones, are another reliable source of income. Though government bonds have long maturity duration (15-20 years), they typically pay an annual return of 8% twice a year. As a result, you can combine them with your other investments to generate income all year.
Numerous Non-Banking Financing Businesses (NBFCs) and housing finance companies offer corporate deposits. Interest is paid on a quarterly, half-yearly or annual basis by these companies. The best strategy here is to broaden your investment by purchasing funds from a variety of high-ranking companies.
Systematic Withdrawal Plan (SWP) from Mutual Funds
A systematic withdrawal plan is extremely popular in India and a great technique to guarantee a consistent monthly income from mutual funds. It allows you to choose a specific sum as a monthly payment on your investment.
There are several reasons to invest in a guaranteed monthly income plan. Let's find out the advantages that the plan can provide.
1. An additional source of income
To remain ahead of your bills and meet all of your family's financial needs is to have a reliable source of income. The guaranteed income plan provides security so that your living standard does not drop even after you retire by generating moderate income.
2. Maturity benefit
When various plans do not provide a safety cushion, saving for a long-term financial objective can be difficult. However, you can save money with a guaranteed income plan and receive maturity benefits in the form of lump-sum payouts.
3. Tax benefits
The majority of people prefer to invest in insurance plans because of the various tax advantages they provide. For example, currently, under the terms of section 80C of the Income Tax Act, 1961, tax exemption can be claimed for insurance premiums paid upto Rs. 1.5 lakhs per annum.
When combined with this scheme, these riders provide additional protection and coverage in the case of an accident, critical illness, or large hospital bills, among other things.
5. Flexible terms
One of the most adaptable and customized investment programmes is the guaranteed income plan. The terms can be customized to ensure that they cover all of the policyholder's requirements.
6. Future financial needs
You can opt to save for your child's education, marriage or provide a safety net for your retirement plan. With the support of guaranteed income plan, you can attain whatever goal you have.
7. Loan benefits
You can get a loan if the guaranteed income plan has reached the surrender value. For example, one can get a loan for 70% of the surrender value. If you have an unexpected financial emergency and need money quickly, the guaranteed income plan might serve as a backup plan.