Imagine if your salary could earn its salary. There are various monthly income plans for you to opt from. If you put your money in a monthly income plan, you get regular pay-outs from your interest earnings and your principal amount back at the end of the tenure period. Interested? Read on to learn more! This article will tell you everything you need to know about the best investment plans for monthly income and whether you should invest in one.
What is a Monthly Income Plan?
A monthly income plan does exactly what it says on the box: it’s an investment plan that allows the investor to receive money on their investment regularly, usually monthly. Many financial institutions like banks, insurance companies, and mutual fund companies offer monthly income plans.
Best Investment Plan for Monthly Income
This is a list of popular investment plans for monthly income-
- Long-Term Government Bonds
- Senior Citizen Savings Scheme
- Corporate Deposits
- Post Office Monthly Income Scheme
- Systematic Withdrawal Plans
- Annuity Plans
Types of Monthly Investment Plans
With the best monthly investment plans, you have multiple choices to pick from. Here, we’ll take you through some unique features of the best investment plans for monthly income now.
Monthly Payment
While many investment plans offer guaranteed returns at regular intervals, the best investment plans for monthly income provide monthly income. Like clockwork, investment plans with monthly returns ensure that you promptly receive your payout every month.
But wait: what if you don’t trust yourself at the shopping mall? Want the money two years from now, when you finally quit your job and travel the world? You can choose a monthly income plan that starts your payouts a few years from now. With the best investment plans for monthly income, you’re the boss!
Benefits at Maturity
Unlike investment plans like fixed deposits or stock investments, the best investment plans for monthly income offer benefits at the time of the policy’s maturity along with your returns and your investment. Remember return gifts at the end of birthday parties? Monthly income investment plans with insurance companies offer a one-time payment at the time of maturity along with your returns and principal investment amount.
Also Know: 1 Year Investment Plan
Features of a Monthly Investment Plan
Monthly investment schemes have several distinct features that make them an excellent investment plan for many people. One of the most important – and obvious – features of the best investment plans for monthly income is that it offers a regular source of income based on your savings. Instead of letting your hard-earned money sit idle, you can wisely invest in the best monthly investment scheme.
Other features of best monthly investment plans include:
Flexibility
The best monthly saving schemes offer immense flexibility that can be tailored to your specific needs and investor profile. Got a lot of money for your birthday? Just have a little bit of money left over on the last day of the month? The best monthly investment scheme allows you to invest as much or as little as you like.
Liquidity
Are you thinking of water? Other, more enticing beverages? In investment speak, liquidity refers to how quickly you can access your assets and turn them into cash. The money in your savings account, for instance, is liquid. The house you bought two years ago, on the other hand, is not; it’ll need to be sold before you can use what it’s worth for other purposes. The best investment plans for monthly income are more liquid than many other investment options. This means there is no lock-in period, and you can withdraw your money whenever you like.
Guaranteed Income
If you invest in the best monthly investment scheme, you are guaranteed that sweet cash every month without fail. How much you make will depend on where you invest: market-linked monthly income plans offer higher returns but are riskier, while bank or post office monthly schemes offer lower but steadier returns.
Low Risk
The best investment plans for monthly income, even when they connect to market fluctuations, offer stable and low-risk returns. Invest your money in low-risk investment options like fixed income instruments and preferred shares, even through mutual fund companies. Of course, if you want to minimise risk even further, India Post and banks offer some of the best investment plans for monthly income in the form of FDs, which provide reliable returns on steady, fixed interest rates.
Also Read: Short term investment
Who Should Invest in a Monthly Income Plan?
The best investment plans for monthly income are a great investment option for many people. Retired individuals, for instance, can secure assured and regular returns without having to worry about their money. Similarly, if you don’t receive your income every month – as a freelancer, for instance – and receive income at irregular intervals, the best guaranteed monthly income plan are a great way to ensure you have regular cash flow regardless of external sources of income. Finally, if you’ve had an unexpected windfall like winning the lottery, you can put the money in the best monthly investment plan to keep it safe while also earning a regular income.
Investment Plans with Monthly Returns
Post Office Monthly Income Scheme (POMIS) by India’s Department of Posts
The Indian Department of Post – the boss of the quaint little post office near your home – doesn’t just handle letters and postcards. India Post offers banking services used by millions all over the country, including one of the best investment plans for monthly income and fixed deposit schemes. Their monthly income scheme offers one of the best interest rates in the country at 7.30%. You can invest up to Rs. 4,50,000 if you’re an individual account holder and up to Rs. 9,00,000 in a joint account!
The Post Office Monthly Income Scheme also gives you an extra 5% bonus amount at maturity with their already great returns.
Fixed Deposits
FDs are one of the most famous and well-known investment plans today. They work like piggy banks from when you were a kid: you deposit a fixed sum with your bank for a decided period. The difference between your childhood piggy bank and the fixed deposit at your bank is that the bank adds to your deposit based on a fixed rate of interest, so your money earns you more money! Many fixed deposits offer monthly payouts on the returns based on your interest rate.
Systematic Withdrawal Plans (SWP) from Mutual Funds
If you’re willing to take slightly higher risks with your investment strategies, mutual funds are the best investment plan with monthly income. They are connected to market fluctuations, so your returns will change based on how the economy is doing.
Mutual funds offer unique plans called Systematic Withdrawal Plans (SWPs) that guarantee you a monthly income based on the fund’s performance. You can also decide on the amount you want every month and on a particular date, units amounting to that value.
Monthly Income Schemes for Senior Citizens
Many institutions offer special monthly income schemes exclusively for senior citizens. These are a great way of investing any extra money you have at retirement to supplement your pension. The best monthly income schemes for senior citizens are low-risk and offer high returns with excellent interest rates.
Also Read: Best Investment Plans for 5 Years
Things to Remember Before Investing in Monthly Income Schemes
That speedy warning about investment schemes on TV has an important point: you need to understand where you’re putting your money. Before investing in monthly income investment plans, it’s essential to understand certain important things-
- Risk: If you’re opting for investment plans connected to market performance, you choose to assume high risk on the investment. While you stand to make a lot of money, you also stand to lose a lot. However, you can mitigate it by investing in more stable investment plans; however, you will have lower returns.
- Diversity: You know the saying “don’t put all your eggs in one basket”? Monthly income plans are among the many baskets your financial eggs can go in. They allow you to spread your investments across asset classes, protecting you from loss.
- Loss of compound interest returns: When you choose to receive the returns your investments are making instead of reinvesting them, you lose out on the significant benefits of compound interest on your principal amount in the long term.
- Simplicity and convenience: Monthly income investments are a great way to ensure a regular inflow of cash every month. The peace of mind is a great perk if your income is not otherwise assured.
Also Read: Investment Calculator
Why Go for Monthly Savings?
Monthly investment plans guarantee returns to you at regular intervals. A steady income offers excellent financial stability in the long run. Of course, as with any investment plan, you’ll have to look into your choice of monthly income plan in detail and consider the kinds of returns it offers, how often the payouts come and if it provides flexibility; what the premiums are like, and so on. Your investment choices will depend on your income, lifestyle choices, and your financial goals in the future.
Some monthly investment plans also offer insurance covers with their terms, giving you the peace of mind to know you have a contingency plan for hard times.
Key Takeaways
- A monthly income plan is like having an extra salary: you invest a sum of money with a financial institution, and you are paid the returns regularly, giving you a steady and regular income.
- Monthly saving schemes are great if you’re looking for a steady source of income at regular intervals. It is particularly great for retired people, people with irregular incomes, and even if you want a little extra spending money later down the line.
- Many financial institutions, from banks and mutual funds to India’s post offices, offer the best investment plans for monthly income. The best fit for you will depend on how much you want to invest, how long, and how much risk you are willing to take.
Conclusion
The best investment plans for monthly income are, all in all, a great investment option for many people in many circumstances. Retired people, freelancers, and people with extra money to spare can all benefit from regular and guaranteed returns. The financial stability and peace of mind offered by monthly income plans are excellent reasons to consider investing in one.
FAQs
There are many reasons to invest in a monthly income plan: this is an excellent option if you have the money to spare and want a regular income. If you’re about to retire or are a freelancer looking for a more steady flow of cash, a monthly income plan is an excellent fit.
POMIS stands for Post Office Monthly Income Scheme. It is offered by the Government of India’s Department of Post. It provides monthly returns at an interest rate of 9%.
Some monthly income plans are low risk, such as those offered in the form of FDs and by the Post Office. However, market-related investment schemes come with more significant risks.
Yes, many of the best investment plans for monthly income offer a bonus at maturity in addition to your returns based on interest and your principal amount.
Options you can invest in Lump Sum Mutual Funds, ULIPs, Traditional Guaranteed Monthly Income Schemes, Pension Plans, Fixed Deposits and Child Plans.
