Best investments to get monthly or regular income
While there are several investment options available, I keep getting comments on blog or email messages asking what are the investment options available where one can get monthly or regular income. While I was evaluating several investment options, I found there are 5 investment options where one can invest and get monthly or regular income. In this article, I would detail about various investment options to get regular income, its features, positive and limiting factors.
Also read: Bank FD Vs Debt Mutual Funds – Which is better investment options
Best investments to get monthly or regular income
1) Post office MIS Scheme (POMIS)
- If you are zero risk taker and want to get regular income, you can invest in Post office MIS Schemes to regular monthly income.
- You need to open POMIS for 5 year period.
- Fixed returns of 8.4% per annum are paid every month. E.g. if you invest Rs 100,000, interest amount would be Rs 8,400 per annum and you can expect monthly income of Rs 700.
- Such income should be added to your income and necessary income tax needs to be paid.
- This investment option would not be suitable for investors who are in high tax bracket, as post tax returns would be very low.
2) Bank fixed deposits
I need not tell you that this is every one’s favorite investment option. If you are conservative and low risk taker, you can opt for bank fixed deposits to get regular monthly / quarterly / yearly income. Please note that not all banks are offering monthly interest payment. They are generally offering quarterly or yearly payment.
- Bank FD’s would offer fixed returns between 8% to 9% per annum. E.g. if you invest Rs 100,000, interest amount would be Rs 9,000 per annum (9% per annum interest rate) and you can expect monthly income of Rs 750.
- Bank would deduct TDS of 10% if you submit PAN card. If you do not submit PAN card, TDS would be 20% on the interest amount. The interest amount needs to be added to your income and necessary income tax has to be paid irrespective of what bank has deducted.
- This investment option would not be suitable for investors who are in high tax bracket, as post tax returns would be very low.
3) Monthly Income Plan (MIP) Mutual Funds
MIP Mutual funds are those whose objective is to provide regular dividends to its investors.
- Unlike Bank FD or Post office MIS Scheme, the returns are not guaranteed in MIP Mutual funds. They would fluctuate and are in the range of 8% to 9% per annum. Means if you invest Rs 100,000, assuming a return of 9%, you can expect a monthly (assuming they would pay every month) return of Rs 750.
- There is no guarantee that MIP mutual funds would provide regular monthly returns. Thought the objective is to provide regular returns, sometimes these mutual funds would not pay any amounts for several months.
- Since the amounts paid are dividends, no income tax is applicable once it is in the hands of investors. Means, the returns are tax-free.
- This is the best investment option for individuals who are in high tax bracket of 20% or 30% as the returns received are tax free.
- Some of the good MIP mutual funds are Birla SL MIP II Savings 5 or ICICI Pru multiple Yield Plan A or Plan B etc.
4) Debt mutual funds with dividend options
I would not say that this is monthly income option, but it would fall under regular income option. You can invest in debt mutual funds with dividend option so that you would get regular dividend through this.
- The dividends amount is not guaranteed and can fluctuate between 6% to 10% per annum.
- Dividends received are tax free in the hands of investors.
- This too is good investment option for individuals who are in high tax bracket as returns are tax-free.
- Some of the good debt mutual funds are like SBI Dynamic Bond Fund or IDFC Dynamic Bond Fund etc.
Also Read: Benefits of Systematic Withdrawal Plan (SWP) in Mutual funds
5) SWP through debt mutual funds with growth option
- I have been debating on this method for some time whether this can be treated for regular income option.
- Debt mutual funds with growth option would provide good returns if invested for medium to long term period.
- However what I am talking here is Systematic Withdrawal Plan (SWP) for such options. Means if you invest Rs 100,000 in debt funds where the returns would range between 8% to 10% per annum, assuming 10% returns, one can expect a return of Rs 10,000 per annum. So you can do a SWP for Rs 833 per month and treat this as regular “in-flow”.
- One should be little cautious as you are withdrawing the amount from your overall investment irrespective whether an investment option is yielding a return or not. For some reason, if your investment is not getting say 10% returns, but you are withdrawing 10%, means you are withdrawing the money from your capital and not from returns.
- From tax point of view, if you do SWP, you need to pay short term capital gain tax within one year. However after one year, it falls under withdrawing the capital amount, hence no income tax is applicable on such as amounts.
- This is good method for those who want regular income, but want to invest for long term benefit.
Conclusion: There are only a few monthly or regular income options available now. My advice is to invest them in various options to gain experience and select one which is best suitable based on your risk appetite, period of investment and tax point of view.
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Suresh
Best investments to get monthly or regular income
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I want to start own business with investement upto 25 lakhs taking loan from PMEGP.
Please do needful to advise
Hi Suresh,
How about co operative society? While, they are giving almost near to what comes in mutual funds.
A well know reputed co operative almost gives near by 11% P.A.
Can you explore more on this?
Regards,
Ramesh
Monthly returns
I want invest 15 lac for one time and how much returns
I have invests 5 lac so l want for suggestion &want monthly income .how many intrest paid me
I have invests 5 lac so l want for suggestion
Sir i have 14 lakhs rupees and i want fixed monthly income. could u please give me suggestion.
What is the option for an Indian citizen after His/Her retirement from a private company. Do we have any social security to protect senior Indian citizen. Do we have any safe investment to get a decent monthly income to have a decent survival after His/Her retirement according to the cost price of current economic situation in India.
yes you are correct. No such option like a social security for who are working in private company. Personal Provident Fund is there but that will not meet and give returns based on GDP
We have 80-85 lacs as a society one time amount. Society is under registration process, we want fixed return of around 85-90 thousands or more per month.
We want to spread the amount propely so that in some emergency we can withdraw some portion without distrubing the total amount
i have 1000000rs invest and need fixed income after next month.
Sir,
I have Rs.10,000 only is my own. I want to better returns on this amount monthly. Please guide me and say how much I would fount in a month and which company or financier gives better offer in my case.
Thankyou
With Best regards
sir i have 20 lakhs for investment and i need a fixed monthly income without ant risk.I have invested it in sbi fd now but the intrest rate is 7.25% so i think some good return so suggest me and new plan
You can join social trade for fix monthly income surely you get best amount of your investment
Sir, my mothet retired last year having nearly 30 lakhs ad retirement benefit which she wants to invest in property in chennai, where in no future plans of settleing in chennai. We reside in Bangalore, and do not have any future plans of settleing in chennai. She would like to invest in property in Bangalore as well.
How viable is the plan to invest in property or could you suggest anyother investment plan with a regular monthly income.
Kindly advise.
Hi Gayathri your message was clear but your plans was not clear. I mean to say future.One of the best ideas is to do your money is depsit in government banks you will get 8% of creadit to your account every month .do this and enjoy ur life with ur mom.
Very Best
Mani
Suresh,
I enjoy your blogs and insightful information. I’m currently in the final leg of a great pre-IPO, and we’re looking to get the word out to our international friends, who meet the qualifying criteria. This is a wonderful opportunity under a USA commercial real estate company, with a phenomenal track record. Any suggestions are how to reach out to the proper clientele in India? Minimum investment we’re offering is a cap of $10 million usd, but interested parties or institutions who are qualified, may assume positions of $500,000 up to the $10 mill cap.
12% dividend, and it’s already been paid out to the 1st offering group. Oversight in done through one of top CPA firms here in the U.S. and once it reaches IPO proposed by end of the year, in a 18-36 month time frame we’re expecting a 2X-4X ROI position for pre-IPO partners.
Suresh sir, I need immediate pension as my company get closed. I got total 17 lakhs as compensation. Plz suggest me, my age is 47 yrs
hi suresh sir for invest ment in mutual funds or fd what ever ,short term periods like 1 to 3 yrs r good or long term
Short term, just go for bank FD or RD. For medium term of 5-6 years, invest in balanced funds and 8-10 years, invest in all mutual funds to get higher returns
hi suresh sir ,iam an nre, n I want to invest around 12 lakhs for 1 yr ,could u pls suggest me for good returns n better optipons
I’m an individual Business owner. Having my own business regarding that i need some investor who can invest little amount as per their desire if they wish to invest short amount only for a month we will make a contract legally with govt proof . we don’t have any consultant office to make people fool, We directly show our documents also resident area, ON 50 thousand we gives 3 thousand ,
On 1 Lakh we gives 6 thousand
On 2 lakh we gives 12 thousand
On 3 we gives 18
On 4 we gives24
On 5 we gives 30 Intrested one can mail me for getting full details. falakk2106@gmail.com
The payment you said, is this monthly basis??
My investment is abt 7lakhs for 10yrs I want monthly return can u sugest a good scheme
We have a good plan for ur investment in LIC which gives you guaranteed income
Hi Suresh,
Really love to hear that you have passion for finding the best investment option and analysing the risk in each type of investment. I am basically and Engineer and the investments and accounting terms are Greek & Latin for me. I understand a few things, but if you ask about the intricacies in the investment, I am clean Bowled.
I am fully dependent on my financial advisor for my investment. Now, since I am 51 Yrs of age, I am looking for an monthly return of about One Lakh per month.
I am looking to plan for the investment from now over a horizon of 10 to 11 years. Could be kind enough to advice me the investment plan in terms of amount, plan, etc. so that the same can be pursued.
I am an self employed person running a proprietorship engineering company in Mumbai.
Regards
Hi Rajender, Thanks for your appreciation. Like I indicated in the post, I could able to get some of these options for getting monthly saving. You can consider any of them based on your requirement and risk appetite.
i want to invest SIP Policy. pl tell me this ploice is without risk
i have read your above article. very useful. though the returns on bank deposits are guaranteed(?) but are prone to tax.it seems forenior citizen 9% income is a lot less in these high inflation days and there seems to be no other option.
Hi Suresh,
Currently i have invested in PPF,Sweep-in FD,FD ,Ilfe insurance (BLSI-Dream Retirement plan) and real state. but wanted to close my BLSI after the locking period gets over as the Premium is high and return is low but it no risk plan.
i am looking for high return with low risk and as well as retirement pension scheme but dont want to go for post office scheme
Regards,
Ritesh
Ritesh, Many burnt their fingers by investing insuch specific retirement plans or insurance cum investment products. There are better choises than this. If you want to invest ith low risk, but expect high return invest in balanced funds like HDFC Prudence fund or TATA Balanced fund or ICICI Balanced fund. The returns would be 9% to 11% per annum in long run. I don’t think there is any good retirement pension scheme except for NPS or EPF/VPF. You can read articles on these topics on our blog to get more info.
I am planing to retire in 2 years from now .i work abroad.i am 39 yrs and wife 31yrs,daughter 9 yrs.
i am conservative so wish to invest in low risk schemes.
already done invst in fd 9 to 10% int a sum of rs 5 laksh for college (year 2022)assumption maturity of 10 lakhs.
invst in fd 9 to 10% int a sum of rs 5 laksh for marriage of daughter(year 2027)assumption maturity of 20 lakhs.
creating fds 9 to 10% int (target corpus amt 25 lakhs)for a monthly income of 20000 for monthly expenses(minimum garuntee even in inflation).advice on these plans.am i on right track ?
karthik
Hi Kartheeswarn. Thought I agree that you are conservative and low risk investor, but you are putting all your money in one basket. What happens if banking sector collapses ? I am not scaring you, but consider investing in various options. You can invest in Post office TD, Invest in PPF where the returns are tax free. Invest in debt funds if you can take some risk. The returns would be more than 10% per annum.
Hi Sir,
I am thinking to invest in mutual fund for next 2-3 years.
I am confused within diffrent types of mutual funds like Debt,Gold,Equity, SIP, with which one I should go.
Thank You
Manish, if you want to invest for 2-3 years, invest only in debt funds like SBI Dynamic bond fund or IDFC Dynamic bond fund etc.
Sir, I heard a lot about Reliance Mutual Funds Regular Saving Scheme. what's your opinion about this ?
Hi Vihaan, Reliance regular savings fund is diversfiied fund. Currently Crisil rates this as Rank-3 out of 5. This is average scheme. Better to stay away from this. In case you have already invested, better to hold for some time before exiting
Dear Suresh,
Among all the 5 options you have mentioned, the last option (Option-5) seems very interesting for me. Probably I can use this method in my sunset years as I can modify the SWP option at any point of time to match to the expenses. Also, the debt funds are relatively less volatile when compared to other equity funds. If I choose liquid fund, this would be more appropriate option for any. Pls correct me if my understanding is wrong.
Thanks
Ravikumar N
You are right Ravi. But I could not understand your last point on “Liquid funds”. Looks it was incomplete sentence or I am missing something?
The returns of Fixed depositwes are very low and same being taxable means Banks will have no money coming in if a person decides to go in for a mutual fund or some ulip debt plan for taxfree returns.Its a strange tax delema. Also commodity market which is the refelection of inflation in the economy provides bertter after tax returns.
Rajeev, I feel commodity market is high risk compared to stock market returns. I am talking about safe options where one can expect some money (it could be less money with some risk). But do we expect regular returns from commodities, if so, how ?