Ashish’s monthly salary is Rs 30,000. He doesn’t save much, spending most of his earnings on trips, movies, and shopping. His colleague Saurabh, who also earns Rs 30,000 per month, manages to save 10% of his pay (Rs 3,000) each month for an investment plan.
Wondering how to choose the best investment plan that can secure your future? Let’s find out!
Following in the footsteps of Saurabh, Ashish begins to save Rs 3,000 per month for an investment strategy that will quadruple his money in a few months or even years with little or no risk.
If you, like Ashish and Saurabh, have a significant amount of discretionary money, putting it into plans that provide consistent monthly income is a smart option. This assures that your unused money starts paying dividends or making profits.
What is a Monthly Income Plan (MIP)?
A monthly investment plan is a form of investment in which the investor invests a one-time deposit in exchange for monthly income. Monthly investment plans include monthly income fixed deposits, SCSS, POMIS, and SWP mutual funds, among others. All of these investment alternatives have one thing in common: a monthly income that is guaranteed.
Each investment has its own risk, features, terms, and conditions. These funds are either government-backed or managed by a third party. In any event, investing in such plans is really simple and straightforward.
Benefits of Best Monthly Investment Plan
1. Guaranteed regular income
The best investment plans provide several benefits. A monthly investment plan provides investors with the best of both worlds, from a guaranteed income that you or your nominees will get no matter what to a significant insurance cover at the same time. People should choose these plans for their low-risk profile, if nothing else.
With market volatility a component of the economy and expected to stay for the foreseeable future, these online money income choices provide investors with a financially successful policy that will hold good in times of need.
2. Get insurance cover
A Monthly investment plan provides specified coverage for the insured and a variety of optional add-on riders. This provides the insured parties and their nominees with safe and secure coverage in the event of an unexpected catastrophe.
Optional coverage protects against income loss caused by severe diseases, accidents, incapacity, or loss of insurance owing to failure to pay the premium for whatever reason.
3. Tax Benefits
The online monthly investment plans and the traditional monthly income plans provide tax benefits under sections 80C and 10(10D) of the Indian Income Tax Act. This means that your income is significantly decreased, and if you’re lucky, you can also get your income tax slab dropped to a lower tax bracket on the rung.
Best Monthly Investments Plans in India
The following are the best investment plans for earning a constant income:
1. Fixed Deposit (FD)
A Bank Fixed Deposit asks you to invest a set amount of money for a set length of time in exchange for monthly interest payments on your deposit.
The interest rate is determined by the length of time your FD has been open. Most banks offer FDs with interest rates ranging from 8% to 9%. This rate, however, is expected to climb in the foreseeable future, making FD a more enticing alternative for people with a low-risk tolerance quotient.
2. Long-term Government Bond
Despite their extended maturity dates (15-20 years), government bonds often provide an average yield of 8% twice a year. As a result, you may mix them with other assets to profit throughout the year.
You’ll also get your whole principal returned when you reach adulthood. Long-term government bonds are frequently traded on the secondary market, which means they can be acquired anytime.
3. Mutual Funds
Mutual funds are a type of monthly investment plan in which money from many individuals is pooled and invested in a diversified collection of asset classes (such as stocks and bonds).
Mutual funds are moderate to high-risk products with investment durations of many years that traditionally produce more significant returns than low-risk investments. Mutual funds also provide a Systematic Withdrawal Plan, which redeems the investor’s monthly units.
4. Dividend Stocks
Stocks are an excellent method to diversify an investor’s portfolio. Because of the long-term growth in index values in the securities market, wealth building through stocks is often greater than wealth generation through any other financial instrument.
Dividends are a percentage of a company’s profit that is dispersed proportionally to shareholders after each fiscal year. Investors might look for equities of firms that pay regular dividends and have strong fundamentals to assure such income consistency.
5. Senior Citizen Saving Scheme
Individuals over the age of 60 are eligible to participate in this low-risk, high-return investment plan. The monthly investment plan pays a 9% interest rate and distributes the money every three months during the year. The maturity duration of the plan is five years; however, it can be expanded for an additional three years.
6. Public Provident Fund
The Public Provident Fund (PPF) is a governmental investment scheme that allows members to make risk-free long-term investments. Every quarter, the government changes and pays the interest rate on a PPF account. PPF investments have a 15-year maturity term. However, after six years, you can only take a part of the money in your PPF account.
7. Unit Linked Insurance Plans (ULIP)
The investor or policyholder can pay the premium for a ULIP monthly or yearly. To sustain ULIP, investors are obliged to pay an annual fee.
A portion of the premium is used to provide insurance coverage, while the remaining is invested in the fund chosen by the policyholder (Equity, Debt, or Hybrid). Beneficiaries will get insurance coverage or a market fund, depending on the chosen ULIP plan.
Wrapping It Up
A consistent monthly income is required to guarantee that all daily necessities are met and that a household’s existence is never jeopardised, even in the most challenging circumstances.
Income-producing assets provide financial stability and enable individuals to grow liquidity and explore other investment opportunities with a supplemental source of income, creating wealth and assuring financial independence.You can earn a monthly income by opting for a monthly investment plan. Make sure you select the best investment plan for you and your family!