Best Investment Plans For Monthly Income

Do you want to escape monetary insecurity and enjoy a steady monthly income? Don’t worry, you are not the only one. In today’s fast-paced world, finding a stable and independent source of income is vital.

Although many investment vehicles can provide regular earnings, not all can align with your goals, risk appetite, and tax situation. So, how do you find the best monthly investment plan for your needs? 

Whether you’re a seasoned investor or a beginner, this guide will equip you to make the right choices. Join us as we explore the best investment plan for a monthly income that can pave the way for your financial freedom.

Understanding the Power of Monthly Investment Plans

The best Monthly investment plan or scheme provides a regular income stream from your invested capital. They are ideal for building a passive income stream, supplementing your regular earnings, or planning for retirement. Here are some compelling benefits:

1. Offers reliable and consistent earnings, providing stability and peace of mind.
2. Diversifies your investment portfolio, reducing risk and enhancing financial resilience.
3. It boosts your regular income, helping you meet expenses without tapping into your principal savings.
4. It enables you to build a passive income stream for your post-retirement years.
5. Enjoy tax benefits on some investment plans under various sections of the Income Tax Act.

Decoding the Best Investment Plan for Monthly Income: Expert Insights

With a steady monthly income, you gain the flexibility to pursue goals and enjoy a higher quality of life without worrying about monetary limitations. Here’s a closer look at some of the best options:

1. Unit-Linked Insurance Plans (ULIPs)

Want a comprehensive solution that offers life insurance coverage and investment benefits? Look no further than ULIPs! 

These customizable plans offer robust returns, helping you align your assets with your goals and risk appetite.

Rate of Returns: 9-12% p.a.

Period of Investment: 5 years

Min and Max Amount: Starts from ₹1000

Tax Benefits: Under Section 80 C and Section 10(10D)

Risk Grade: Moderate to High

Key Features:

• Dual benefits of insurance and investment
• Allows partial withdrawals and switching between funds
• Bonuses and loyalty rewards as add-on benefits

2. Annuity Plans

Want to secure a steady income post-retirement? Annuity plans could be your ticket to a worry-free financial future. These plans, offered by insurance companies, offer fixed returns for earlier lump-sum investments.

You can choose between immediate annuity and deferred annuity. The former starts paying returns soon after your one-time investment. But the latter kicks in after a specified period, giving you options tailored to your needs.

Rate of Returns: 7-10%

Period of Investment: Varies

Tax Benefits: Available under Section 80CCC and Section 10(10D)

Risk Grade: Low to Medium

Key Features:

• Guaranteed returns throughout the payout period
• No market performance risks
• Death benefits to the nominee in case of your demise

3. National Savings Monthly Income ​Account (Post Office)

Are you a risk-averse investor looking for a government-backed best monthly investment plan? This plan can be your best bet. The interest rate revises quarterly; as of 1 January 2024, it is 7.4% p.a payable monthly.

Premature withdrawals are not allowed in the first year of deposit. For closure between 1-3 years, a 2% deduction applies, and between 3-5 years, a 1% deduction applies. 

Rate of Returns: Currently 7.4%

Period of Investment: 5 years

Min. Amount: Multiples of ₹1000

Max Amount: Up to ₹9 lakhs (individual) and ₹15 lakhs (joint)

Tax Benefits: No tax benefits

Risk Grade: Nil to Low

Key Features:

• Refund to nominee/legal heirs in case of the account holder’s demise
• Premature withdrawal is allowed after 1-year subject to some penalties
• Available at all Indian post offices, making it easily accessible

4. Systematic Withdrawal Plans (SWPs)

SWPs are a valuable feature of mutual funds that enable you to withdraw a steady monthly income. They are ideal for investors with a lump sum amount to invest who want to generate a regular income.

Rate of Returns: 7-13%

Period of Investment: 5-40 years

Tax Benefits: Depends on the plan

Risk Grade: Medium to High

Key Features:

• Regular income by redeeming a fixed amount
• Flexibility to choose the withdrawal frequency and amount
• Allows the potential for capital appreciation
• Option to switch between different mutual fund schemes

5. Long-term Government Bonds

Issued by the Indian government, these bonds or debt securities have a maturity period of over ten years. The government uses these bonds to borrow money from investors, fund initiatives, and meet fiscal obligations.

Rate of Returns: 6-9%

Period of Investment: Above 10 years

Min and Max Amount: ₹10000-No Limit

Tax Benefits: Interest income taxable

Risk Grade: Low

Key Features:

• Government-backed security
• Regular interest payments
• Option of secondary market trading
• Principal amount repayment at maturity

6. Peer-to-Peer (P2P) Lending

Do you want to explore something beyond conventional market-linked instruments? If yes, check out alternate investment options like P2P lending platforms. According to a forecast, India’s P2P market will reach USD 10.5 billion by 2026. 

You can ride this wave by lending money through LenDenClub – India’s largest P2P platform with a 1Cr+ customer base. With this, you can enjoy reliable monthly earnings and get the principal amount back upon maturity.

Rate of Returns: up to 15%

Period of Investment: Flexible between 1-5 years

Min and Max Amount: ₹ 1lakh to 50 lakhs

Tax Benefits: Taxable

Risk Grade: High

Key Features:

• Direct lending to individuals or businesses
• Safe from Market volatility
• Potential for high returns
• 100% digital transactions

Choosing the Best Investment Plan for Monthly Income

Now that you know the different assets, it’s time to select the best monthly investment plan. Consider the following factors:

Risk Assessment: Find Your Financial Comfort Zone

To select the best investment plan for monthly income, assess your risk appetite. Understand your comfort level and market volatility to align your choice with your goals.

Tax Considerations: Optimize your After-Tax Income

Different investment options are subject to varying tax treatments, and it’s essential to consider the impact of taxes on your monthly income.

Maximize Returns: Make Your Money Work Harder

When assessing the best monthly investment plan, consider its potential returns. Compare the historical performance and projected returns of different vehicles. 

Liquidity Check: Balance Income and Accessibility

Some avenues provide high liquidity, but others may have lock-in periods or limited liquidity. So, opt for plans that balance regular income and flexibility to access funds during unforeseen crises.

Diversification Strategy: Strengthen Your Financial Fortress

Spreading your funds across different asset classes is an essential principle of sound fiscal planning. It cushions the impact of market volatility and economic downturns.

Summing Up

Selecting the best investment plan for monthly income demands careful analysis and familiarity with the available options. You can build a great portfolio by evaluating the plans based on your financial goals and risk tolerance.

Ready to secure a brighter future for yourself and your loved ones? Contact us today and explore the best monthly investment plan tailored to your aspirations.