10 Best Investment to get regular monthly income

My friend is businessman and does not earn regular income He wants to invest

money to get regular monthly income Who don’t like regular regular income

I know you also want to have regular income

by investing money in financial product. To help you we have evaluated

various investment option and we are herewith 10 best investment option

to get regular monthly income in India.

10 Best Investment to get regular monthly income

(1)    Post office MIS

MIS broadly known as Monthly Income Scheme as name suggests one can get

assured monthly return from investment under this scheme. Rate of return

under this scheme is fixed 8%. Investment period under this scheme is 5

years. One will get back his principal amount along with a 5% bonus at

the end. One can invest only up to 4.5 lacs

for an individual account and 9 lacs in a joint account.

MIS Example – Suppose Mr X invests 3 lacs in MIS. Monthly returns in

this case will be 2000 Rs/- per month and Mr.X will get 15000 Rs/-

additional bonus at the end of six year on maturity.

Interest Income from MIS should be added to your income and necessary tax to be paid.

(2)   Fix Deposit

Fixed Deposit (FD)

is a low risk financial instrument where an investment is made for a

fixed period of time resulting in a fixed rate of returns. This is best

suited for investors with a low risk appetite and who wants to invest

a fix sum of money to earn a fixed rate of interest.

Fix deposit is most popular investment option which can offer monthly,

quarterly, yearly return. The interest rate will depends on the tenure

for which you open fixed deposit. Bank FD

would offer 8-9% return per annum.

FD

Example – Suppose Mr X invests 1 lac in FD

for 1 year with 9% return per annum. Yearly interest under this case

will be 9000 Rs/- with monthly income

of 750 Rs/-

Interest amount from FD

is taxable and if your income

is not in taxable range you need to submit form 15G/15H.

(3)   Senior citizen saving scheme

Senior citizen saving scheme is special scheme only for senior citizens.

Investment in this scheme can be made only by people of 60 years of age or above.

The Senior Citizen’s Savings Scheme has a maturity of 5 years, which is

extendable by 3 years. Rate of return offered in this scheme is 9 % per

annum. Interest income will be paid every 3 months.

(4)   Monthly Income Plan of mutual funds

Certain mutual funds have inbuilt structure of providing regular income

which is called as MIP (monthly income plans). Like MIS, FD

or SCSS return in MIP is not guaranteed it will fluctuate and are in

range of 8-9% .

Amount paid by MIP is called as dividends. The dividends are tax-free in

hands of investors.

(5)   SWP from mutual funds

Mutual fund is most popular investment option in India. If you have

invested in equity or debt mutual funds you can generate regular monthly income

from mutual funds by selecting SWP (systematic withdrawal plan).

SWP is reverse of SIP; It is withdrawal of fixed number of mutual funds

unit and selling it in market. This is slight risky way to generate

monthly income

and not advisable for those who are looking for fix kind of return.

(6)   Dividend from Mutual funds

Certain Mutual funds have option of dividend payout. If you don’t want

to in equity directly you can opt for mutual funds with dividend payout.

This mutual funds provide dividend on yearly basis & not monthly, but if you have

diversified and invested in multiple mutual funds like this you can get regular dividend income

(7)   Dividend from Equity

Equity investments are risky in nature. But if you have knowledge and

skill you can make very good money in stock market.

Apart from appreciation in stock value you can take benefit of dividend.

Dividend payout from equity is on yearly basis. If you diversify your

stock investment in 10-12 good stock you can defiantly generate regular

income

(8)   Rent from Real Estate

Real estate is another good way to generate regular income

Real estate investment is high risk high return affair. You can generate

Income by renting property purchased by you.

There are risks involved in this option risk like not getting tenants or

right tenants or fall in property rates.

(9)   Long term Government Bond

Long term government bond is one of the safest options to get regular income

Government bond usually offers 8% return half-yearly. These bonds are

long term bonds and at the end of the tenure you will get back your

principal amount.

These bonds are also tradable in secondary market, so you can also sell

them if you want to get rid of them.

(10)  Annuity from Insurance companies

Annuity from Insurance plan is also one option to generate regular

monthly income But this option will take time to generate income

Returns on these plans will depend on pension tenure and which option

you have taken while buying the product.