One of the most effective ways to fund your expenses after your retirement with the usage of your retirement savings is to search for monthly income investments. The interest that you will receive from your investments can be utilized to fund your regular expenses. This will allow you to fund your investments better. In this article, we will see how to get monthly income from investment in India.
7 Monthly Income Investments In India
Investors often find it difficult to evaluate the right balance of growth and income earning investment options. Income stocks in general have their own set of drawbacks and challenges to consider, like the payout dates. Fortunately, there are several monthly income deposit schemes that payout on a monthly basis. So if you are wondering how to invest 25 lakhs for monthly income then here is your answer. In this article, we will be discussing 7 such monthly income investments that will solve all your doubts.
NBFC Fixed Deposit
This is a fixed deposit monthly income scheme. While FDs are provided by banks, post offices, and companies, it is the deposits by the NBFCs and the companies that offer higher rates of interest. They offer interest on a quarterly basis and you can choose to take the return on any four months in a year. They emerge with additional rates of interest that lie between 0.25% to 0.5% for senior citizens.
Post Office Monthly Income Scheme
For those investors who have zero tolerance for hope and risk of earning recurring income, the Post Office Monthly Income Scheme is the ideal option. The interest is given at 6.6% p.a. Even though the maturity period for this scheme is 5 years, you can withdraw before that if you complete a one year deposit. If you withdraw between 1 to 3 years you will receive a 2% deduction. And if you withdraw between 3 to 5 years you may have to face a deduction of 1% of the total m amount deposited. This is the best investment for monthly income India.
Senior Citizen Saving Scheme
Other than the regular schemes, the post offices in India offer a special investment scheme for the senior citizens of this country. This scheme is called the Senior Citizen Saving Scheme. It is another type of risk free element that aims to provide significant returns. The rate of interest that is calculated annually on this scheme is 7.4%.
Long Term Government Bonds
This is another great option with less risk but a high return. A Long Term Government Bonds pays out the interest once or twice every year. You can mix it with other investments to earn interest all year round. Since these monthly income investments are traded in the secondary market, you can sell them in your desired places.
Equity Share Dividend
This investment option enables gains from investments over the long term along with the aim to offer regular income. But in this case, the risk factor is very high. You will need to create a diverse portfolio that will include many stocks to facilitate a payout ratio that will be of high dividends. Since the dividend is received on profits, and not on the capital there is a higher chance of companies not paying regular dividends.
Indian insurance companies provide annuity plans that provide regular income and low risk. This can be used as a retirement strategy by doing a lump sum investment to get income at a fixed interval. The basic method of classifying annuity plans is based on the time period and is divided into an immediate and deferred annuity. An immediate annuity is receiving regular income as soon as you make the lump sum payment. Whereas deferred annuity offers money after a fixed period of time that is set by you.
Mutual Fund Monthly Income Plan
This is an ideal plan for beating inflation, provided you are prepared to take a moderate amount of risk. The ratio usually lies between 20% to 30% investment in equity shares and 80% to 70% in debt instruments such as the certificates of deposits. A good time span for this plan is 2 to 3 years and you can get monthly income by selecting a “dividend payout option”.
There is no investment without risk. Fortunately, the 7 monthly income investments that have been noted above benefit from a significant defensive appeal and a handsome monthly income. In short, purchase them, hold them, and let them enhance your earning portfolio.