In today’s financial landscape, generating a steady monthly income is a priority. Whether you are looking for an alternative to your current monthly income, want to secure your future or fund your retirement, selecting a good investment plan is important. From deposits to government-backed schemes and mutual funds, each plan offers different returns and risk levels.
In this blog, we will discuss the 10 best investment plans for monthly income in 2024.
10 Best Investment Plans for Monthly Income in 2024
Following is a list of the best monthly income plans you should consider in 2024:
Fixed Deposits
If you can invest a lump sum amount, Fixed Deposits (FD) are one of the best investment options. FDs offer a fixed interest rate set at the time of account opening, which varies by financial institution and is not affected by market fluctuations. The deposit earns interest at this predetermined rate, payable to the account holder at regular intervals (monthly or annually) or upon maturity. A rate of 9.50% is the highest fixed deposit rate.
Post Office Monthly Income Scheme (POMIS)
The Post Office Monthly Scheme is considered one of the best monthly income plans. It is backed by the government and is available across all post office branches in India. This investment plan allows you to earn monthly income without incurring high risk. In 2024, this monthly income plan is offering an interest rate of 7.40% p.a. The minimum investment value is ₹1,000.
Government Bonds
Government bonds are safe investment options for monthly income. Bonds have maturities ranging between 5 and 40 years. Government bonds have sovereign backing which implies that the risk is on the lower side. Additionally, these bonds provide regular interest or coupon payments set by the Government of India. The maturity dates of government bonds are fixed.
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
Pradhan Mantri Vaya Vandana Yojana aims to provide financial security to senior citizens post-retirement. This scheme is sanctioned by the government and offers a stable income at fixed interest rates from 7.4% which is to be paid monthly. Senior citizens are eligible to choose the payment option which will cater to their objectives – monthly, quarterly, annual or bi-annual up to 10 years.
Systematic Withdrawal Plans (SWP)
Some investors opt for a Systematic Investment Plan (SIP) to avoid investing a lump sum amount. With Systematic Withdrawal Plans (SWP), you can redeem some mutual fund units at frequent intervals to achieve your income goals. Under this plan, you are eligible to withdraw only the capital appreciation instead of having to withdraw the principal amount invested.
Equity Share Dividends
Equity share dividends offer you consistent returns along with long-term capital gains. However, the risk level of this investment option is on the higher side. It is important to create a portfolio with diverse stocks to yield a high dividend payout ratio (DPR). If the business does not perform as per expectations, companies can withhold dividends. This implies that although the return is high, it does not guarantee income every month.
Annuity Plans
Several insurance companies offer annuity plans. By investing in a lump-sum amount, you can earn monthly interest after retirement. In addition to this, you have the flexibility to choose from the immediate annuity and deferred annuity options. Immediate annuity generates income as soon as you invest the amount. On the other hand, a deferred annuity generates income after a fixed period.
Monthly Income Plans (MIP)
Monthly Income Plan (MIP) is a mutual fund scheme which invests a small portion in equities, with the majority being invested in fixed-income debt securities. These mutual funds provide consistent returns to investors. However, it is important to note that these returns are not predetermined as they depend on the performance of the fund. It is, therefore, advisable to consider this risk before you invest in MIPs.
Guaranteed Income Insurance Plan
A Guaranteed Income Insurance Plan is a unique type of insurance plan that combines life coverage with a fixed monthly income. Upon completing the premium payment term, investors receive a guaranteed monthly payout, providing a steady income stream. It serves as a savings plan, with income rates and terms varying based on the specific plan and insurance provider chosen.
Senior Citizen Saving Scheme (SCSS)
The Senior Citizen Savings Scheme (SCSS) is a government-backed investment option offering a reliable source of monthly income for individuals aged 60 and above. With a maximum investment limit of ₹30 lakh, this scheme provides an attractive interest rate of 8.2% per annum in 2024, reviewed periodically by the Indian government. It has a fixed tenure of 5 years and is extendable for an additional 3 years.
The Bottom Line
Understanding monthly income investment options, along with their benefits and risks is key to making wise financial decisions. Whether you prefer stable, low-risk returns or you have a higher risk appetite, by going through the 10 best investment plans for monthly income in 2024 in this blog, you can select the most suitable option for your needs.
Frequently Asked Questions (FAQs)
- Can I invest in SIP for a month?
Yes, you can invest in a Systematic Investment Plan (SIP) on a monthly basis. The frequency of your investment can be daily, weekly, monthly or annually.
- Is the SCSS interest rate fixed for one year?
No, the SCSS interest rate is not fixed for one year. It changes quarterly. However, once you make your investment, the interest rate that was applicable on the day of opening your account will be fixed for 5 years.
- What is the maturity benefit of a guaranteed income plan?
The maturity benefit of a guaranteed income plan is that you receive a lump sum amount that is equal to the assured sum at the end of your policy.
