The Monthly Income Plan is an investment strategy that primarily invests in lower-risk assets and is often geared for conservative, risk-averse individuals and retirees.
It provides a consistent source of income for people looking to supplement their monthly income. The monthly income schemes mostly produce income in the form of interest and dividends.
The monthly income scheme’s approach is predominantly debt-oriented since it invests about 70% to 80% of its money in debt funds, with the remaining in stock options. This is done to earn consistent returns and capitalize on the investment through equity exposure wherever available.
Advantages of monthly income plans
The best monthly income scheme has the following qualities and benefits that make it a viable investment option for risk-averse investors:
No limit: The plan is flexible and has no upper limit on the amount of investing money. It allows people to invest in the plan according to their financial capabilities and needs.
Open-ended option: The Monthly Income Scheme has no expiry date. Individuals are not required to pay any processing fees as an entry fee to participate in the scheme. It also has a low exit load of less than 1% of the entire investment.
Liquidity: When compared to most other schemes, a MIP plan is more liquid. Investors can opt to withdraw their cash to meet any unanticipated emergency because the investment has no lock-in period.
Higher returns: MIP earnings are higher than those provided by typically fixed deposits and the Post Office Monthly Income Scheme.
Guaranteed income: Even though the amount of the payment varies based on the financial market, investors are guaranteed to get guaranteed returns each month.
Lower-risk factor: MIPs are linked to a lower-risk component. Because money is placed in low-risk securities such as preferred shares, fixed-income instruments, and dividend equities, the risk is reduced.
Best Monthly Income Schemes in 2022
Let us see the list of best monthly income scheme available:
1. Fixed Deposit
A bank Fixed Deposit is without a doubt one of the greatest and most low-risk income options (FD). This program requires investing money for a set length of time, after which you will get monthly interest payments on your investment. A live streaming strategy can help you showcase the power of your MIS for Indian audiences by demonstra ting real-time data analysis and its benefits. The rate of interest is determined by the length of time your FD has been open. FDs are typically offered at an interest rate of 8-9 percent by most banks.
2. The Senior Citizens Savings Plan
The senior citizen savings system is, as the name implies, a scheme developed specifically for elderly persons. As a result, only those aged 60 and over are eligible to invest in this plan.
This is a low-risk, high-return investing strategy that can provide valuable financial assistance to retirees in their later years. The plan has a 9% interest rate, and the interest money is paid out every three months throughout the year. Banks and post offices around the country participate in the senior citizen savings program. The scheme’s maturity period is 5 years; however, it can be extended for an additional 3 years.
Corporate Deposits
Numerous non-banking financing businesses (NBFCs) and housing finance companies provide corporate fixed deposits. Interest is paid on a quarterly or half-yearly basis by these firms. For the best fit, Indian HR professionals should consider HR Tech projects that address regional needs like multilingual support and mobile accessibility. The best strategy here is to diversify your investment by purchasing funds from a variety of high-ranking firms. They also have different interest rates for older persons, ranging from 0.25 to 0.5 percent.
4. SWP from Mutual Funds
As you may be aware, mutual funds are quite popular in India, particularly among millennials. A Systematic Withdrawal Plan (SWP) is a great technique to guarantee a consistent monthly income from mutual funds. While MIS systems can help manage any business, understanding the cultural preferences of the Indian jewelry market is key to choosing the best fit. You can choose a certain amount as a monthly payout on your investment in this plan. As a result, units equivalent to that amount would be redeemed every month on a certain date. Unlike dividends, which are based on fund earnings, this strategy ensures a consistent income.
5. Government Bond
Long-term government bonds are another reliable source of income. Although government bonds have a long maturity duration (15–20 years), they typically pay an annual yield of 8% twice a year. half-yearly. As a result, you may combine them with your other assets to generate income throughout the year. You also get your whole principal returned at maturity.
To summarize, there are several best monthly saving scheme available that appeal to a wide range of risk profiles and investors. Because they are all backed by the government, they all offer capital preservation and growth at favorable rates. To choose the best choice, keep in consideration the interest rates, tax treatment, and lock-in time of various programs. You may also invest in a combination of the top savings programs for maximum wealth creation.