Every breadwinner of a family wants to secure his/her family's financial needs. So, investing the money in the right places becomes crucial. However, with so many investment options available, it is easy to get confused. Be it someone looking for NRI investment in India or an average Indian citizen, everyone welcomes the idea of monthly returns on their investment.
Keeping that in mind, we have compiled a list of seven investment plans that give monthly returns. Read this article till the end to find out the investment type that suits your financial requirements.Â
NBFC Fixed Deposit
Fixed Deposits can be offered by many institutions like banks, companies (or NBFCs), and post offices. However, Fixed Deposits by companies and NBFCs provide higher interest rates. These companies offer quarterly and half-yearly interest rates. You can also opt to receive returns for any four months of the year. Moreover, senior citizens can get additional interest rates ranging between 0.2% to 0.5%.
Note that there is a possibility of a delay in payment or even default by such companies. So, it is advisable to ensure that the company you select has a high reputation and maintains stable ratings of AAA by CRISIL/ICRA. You can also choose to diversify your risk by placing your money in deposits with multiple companies. This will ensure that you get income every month.
Post Office Monthly Income Scheme
The India Post offers an investment scheme called the Post Office Monthly Income Scheme (POMIS). This investment is an excellent option for investors who are cautious and looking for regular income. It also has government backing. The POMIS currently offers interest at 6.6% per year, payable monthly. The deposit tenure for this scheme is five years. Note that the upper limit of investment for a single investor is Rupees 4,50,000.Â
For joint accounts, this limit is increased to Rupees 9,00,000. Moreover, this scheme allows you to invest as low as Rs.1,500. After the POMIS investment matures, you can reinvest the same amount for another five years.
Long-term Government Bond
Another safe way to generate regular income is by purchasing long-term government bonds. Government bonds offer an average return of 8% twice a year, despite the long maturity period (15-20 years). This implies that you can combine these returns with other investments to make income throughout the year. You also get the principal amount back at maturity. A long-term government bond has another advantage: they are traded on the secondary market, so you can sell them as per your liking.
Senior Citizen Saving Scheme
As the name implies, the senior citizen savings scheme is a special scheme for seniors, open to individuals over 60 years old. Moreover, this scheme is low-risk in nature and offers high returns. It can be used to provide financial support for senior citizens in retirement. The interest rate is 9%, and the interest income is paid in 3-month intervals throughout each year. Both banks and post offices across the country offer senior citizen savings schemes.Â
Note that it must be used within one month of receiving the retirement benefit, and the amount of the deposit cannot exceed the benefit received. The maturity tenure for the scheme is five years. However, it can be extended up to three more years.
Equity Share Dividend
While this option can provide long-term investment gains and regular income, the risk factor is high. To ensure a high dividend payout rate, you will need to have a diverse portfolio that includes multiple stocks. Note that companies may not pay regular dividends because they are paying dividends on profits, not capital.
Annuity
Many Indian insurance companies offer regular income and low-risk annuity schemes. This can be used as a retirement strategy. You can make a lump sum investment and earn income at regular intervals. Annuity plans are classified based on their duration. This is broken down into two types: Deferred annuity or Immediate annuity. The Deferred annuity will pay money over a set tenure, while the Immediate annuity will provide regular income from the moment you make the lump sum payment. Note that there are commissions and surrender fees involved in annuity investments. Also, it does not offer any tax benefits.Â
Monthly Income Plan
A type of mutual fund, Monthly Income Plans (MIPs), invest in fixed income. They also put a minute portion in equity and equity-related instruments. These fund houses also pay their investors a regular income. Note that the fund's performance will determine the amount to be paid. Also, the payouts are not guaranteed as the performance of mutual funds drives the returns.
Moreover, there are potential negative returns as well. So before you decide to invest in a monthly income program, consider your risk profile. You can select the growth option or the dividend option for monthly income plans. Also, the MIP will declare dividends only when there are profits.
Who Should Invest in a Monthly Income Plan?
A MIP scheme is a viable investment option for retirees with a limited source of steady income. This scheme will provide them with an income source every month and help them plan for any unexpected expenses. Investors who are cautious and averse to risk can also invest in the Monthly Investment Scheme.
Moreover, Individuals in the higher tax bracket may also be interested in MIPs to increase tax efficiency. On the other hand, individuals in the lower tax bracket who want to increase their earnings potential can look into growth-oriented options of these plans. They will be able to earn higher returns and reduce their tax burden.Â
NRI Investment in India - What are the Options?
If you are looking for NRI Investment in India, there can be many options. We have listed the popular ones below:
National Pension System
Fixed Deposits
Real Estate
Direct Equity
Mutual Funds
Public Provident Fund
Final Word
Financial security is essential for any household. Not being able to cover the cost of living with a stable source of income can cause financial problems in any family. So, individuals should consider their current living standards and make informed investment decisions to support them when god forbid, any uncertainty happens. The investment options mentioned above could be great options to secure the financial requirements of the family.
˜Top 5 plans based on annualized premium, for bookings made in the first 6 months of FY 24-25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
Past 10 Years' annualised returns as on 01-03-2025
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
Tax benefit is subject to changes in tax laws. Standard T&C Apply
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).
Generate wealth Earn 1 Cr# in maturity with Zero LTCG tax¶
Double tax savings^ On premiums (under 80C) and on maturity (under 10(10D))
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