Best Monthly Income Schemes for Effective Investment Planning 

You can define a monthly income scheme as an income-generating investment instrument. Such plans are designed to offer a regular income stream where you can receive scheduled payouts on your invested sum. Typically, the best monthly income schemes aim to create a reliable corpus flow by offering interest earnings, capital gains, or dividends, based on their returns-generating scope and ability. Today, multiple monthly income plans are available in the market which can be categorized under savings plan, mutual funds, real estate, pension plans, fixed-income products, and more. Based on your financial goals and investment horizon, you can pick a suitable monthly income scheme and streamline your planning.

Top Monthly Investment Plans for You

Some of the best monthly income scheme for you would be –

Debt funds

Typically, a category of mutual funds where your money would be parked in fixed-income options such as government bonds, money market instruments, and commercial bonds. You must note that these funds have been designed to provide regular interest earnings, which makes them ideal for investors seeking a stable monthly income flow. The best thing about these plans is that they expose you to modest risks.  Debt mutual funds are handled by professional fund managers whose expertise and skills allow them to refine your investment plan and improve the profitability of your portfolio.

Equity Funds with Dividend 

Some equity mutual funds will offer you the choice to opt for dividend earnings. You should note that in such an arrangement, a part of the profits earned by the fund would be extended as dividends to you. These monthly income schemes will offer you an ideal blend of capital growth and regular income, allowing you to experience the best of both. However, there’s a catch. The dividend payouts are not promised and their percentage will depend on your choice of mutual fund’s performance and the fund house’s discretion.

Corporate Fixed Deposits 

If you are wondering how to save money, then fixed deposits are another extremely popular investment option and could be a hit among your peers as well. Typically, banks and NBFCs offer fixed deposits with interest rates higher than savings accounts. Those plans will also offer monthly payouts, making them ideal monthly income instruments. However, it is important that you understand the withdrawal clause and lock-in period rules to make the most of the scheme.

Senior Citizen Savings Scheme (SCSS)

This is one of the most popular monthly income schemes in India that has been designed to meet the needs of older adults. The government-backed scheme is meant for those above the age of 60 and offers them an ideal blend of financial stability and security. SCSS can offer you a prefixed interest rate and a quarterly payout. It could help create a stable monthly income source for you if you who limited income streams after your retirement. The government backing makes this a relatively low-risk investment option, making it suitable for those with low risk-taking capacity. You can also avail of tax benefits under Section 80C of the Indian Income Tax Act and save more. 

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Post Office Monthly Income Plan 

POMIS is another government-backed investment instrument that can generate a monthly income. It will offer you a pre-disclosed interest rate and monthly payouts as interest earnings. POMIS is also suitable for those with low-risk appetites but who seek stable income to meet their expenses. With an investment window of 5 years, post office monthly income plans offer higher returns than savings accounts. You can visit your nearest post office to open a POMIS account or know more about the scheme.

Rental Income from Real Estate

Residential and commercial real estate sectors have emerged as a potential source of monthly income for investors. More individuals are becoming comfortable leasing out their properties to companies, warehouses, tenants, and retail shops to generate a source of earnings in the form of rental income. With more buyers seeking green buildings and sustainable property designs, investors are parking money into properties that meet these standards. You can park money into such properties as they are valued higher than conventional buildings and can help you contribute to India’s sustainability goals. Green buildings generate much higher rental income, allowing investors to appreciate their capital over time. However, if you wish to avoid the hassles of owning a property but want to capitalize on the growth of the sector you can consider exploring Real Estate Investment Trusts or REITS. This investment structure pools money from various individuals to invest in a property, offering a fractional share of the unit to invest. Such a setup lowers associated risks but helps generate a steady income stream.

Annuity Plans

These plans are essentially insurance products that can offer you a guaranteed income stream for a period of time. Annuities are designed to help individuals plan their retirement and generate a steady monthly income to support their financial needs. However, to participate in this, you would first need to invest a lump sum amount based on which you can generate immediate or deferred payouts. Also, you should note that it would not replace a pure protection plan, so consider having a comprehensive life cover at your disposal.

Dividend-Paying Stocks

While similar to equity mutual funds with dividend options, this particular plan comes with higher risks. Typically, through this plan, you would be investing in high-quality dividend-yielding stocks that can offer you monthly income. However, unlike mutual funds, you would face undiluted market risks when investing in this option. This is why it is recommended that you assess your risk profile and then analyze the risk quotient of different dividend-yielding stocks before investing in them. It is always recommended to opt for instruments with proven track records and strong fundamentals.

Who Should Park Money into Monthly Income Schemes?

If you are keen on generating a steady source of monthly income, you should consider investing in such schemes. However, the following category of people could benefit more than others –

Senior citizens seeking to build a regular income stream for their retirement can explore monthly income schemes. However, they must explore plans with limited risk to safeguard their capital. Similarly, individuals looking to create a supplementary income source or planning to meet future goals can explore these plans. Lastly, those keen on wealth creation but also want the assurance of regular earnings should invest in monthly income schemes.

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