Investment Plans

Monthly Income Plans To Invest

Nov 29, 2021

Top Monthly Income Plans

It is absolutely crucial for everyone to build up funds from where they can receive monthly incomes during their post-retirement years. At times, the income received from the monthly income plans come in handy even when the investor is still employed and earning a regular salary. 

These monthly income investments are good options for wealth creation and help you in various ways. 

Best Monthly Income Options

  1. Non-Banking Finance Company (NBFC) Fixed Deposit: 
    Fixed deposits are very common and popular modes of investments that many people rely upon. However, the regular fixed deposits offered by the banks have a low rate of interest. As a result, the returns earned are not too high. 

    The fixed deposits offered by the private companies and NBFCs are often available at a higher rate of interest. Most of these FDs also have the option of the dividend payout at regular intervals. If you opt for these funds, you may successfully be able to set up a monthly income option and get some extra finances for your day-to-day activities.

    There are a few points to remember here though. The returns earned may take slightly longer to reach you. Also, you need to be careful when selecting the NBFC as fraudulent funds are not unusual in this sector. Just do some research and invest with a reliable company and you won't face too many issues.
  2. Post Office Monthly Income Scheme:
    Many people dislike taking risks with their investments. If you too have a zero-risk tolerance, then consider investing in the Post Office Monthly Income Scheme. You can start investing in this scheme by visiting your local post office. Make monthly deposits and receive fixed returns. An interest rate of 7.6% was available in January 2020. This is a decent interest rate and you get steady yields. You can withdraw the dividends from time to time and that can work as a regular income.
  3. Senior Citizen Savings Scheme: 
    If you are of 60 years of age or more, you can opt for another post office saving scheme - the Senior Citizen Savings Scheme. This is a special scheme only available to the senior citizens of India. You can earn a rate of interest of 7.4%. This is a good and very handy Monthly Income Plan(MIP) available to the seniors that offer monthly payouts.
  4. Annuity:
    The life insurance companies in India offer some very good annuity plans where you can invest for a period of time and then receive monthly payouts after your retirement. There are two options here:

    Deferred annuity plans - The deferred annuity plans allow you a period of 20 or even 30 years to build up a retirement corpus. They are life insurance plans. A part of the premium you pay goes towards a life fund and the remaining gets accumulated in an annuity fund. You can save over time in a relaxed manner and by the time you retire, your fund will build up. Then, you will get monthly payouts. There are various annuity options available and you can choose according to your preferences.
    Immediate annuity plans - If you are about to retire or have recently retired and never invested in a deferred annuity plan, you can invest in an immediate annuity fund with a lump sum amount. The amount will get locked in a fund and you will receive monthly payouts in a seamless easy manner.

    Choose the option that suits you the best and be assured of having a lifelong income. You can remain financially independent post-retirement with the help of the annuity plans.
  5. Mutual Fund Monthly Income Plan:
    And finally, we have the all-popular and much-in-demand mutual fund monthly income plans. Also known as MIPs, hybrid mutual funds that are debt-oriented in nature. These plans offer a monthly, pre-decided payout to the investor. 

    The plans usually consist of about 75% debt funds and 25% equity funds. As a result, you get the benefit of high returns and a balanced risk as well. You can choose to withdraw the dividends and get an income option, or you can choose to invest it back into the fund to get compounded earnings. MIPs offer a higher return as compared to the fixed deposits and post office schemes. 

    Some of the popular MIPS include:
  • Birla Sun Life MIP II – Wealth 25 Plan
  • Franklin India Monthly Income Plan – Plan A
  • HDFC Monthly Income Plan – LTP
  • ICICI Prudential Regular Income Fund
  • ICICI Prudential MIP 25 

Monthly Income Plans Should Be a Part of Your Investment 

As you can clearly see from the points mentioned above, the various investment opportunities for monthly income plans allow you to stay invested and also offer a monthly income facility, which proves to be very helpful. So choose your plan carefully, as per your needs and also your financial goals and you will have some very fruitful investments made in no time.

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