For youngsters and the elderly alike, it is advisable to invest a portion of their money in such a manner, that they get some returns each month which can bolster their lifestyle and give them financial stability. Monthly Income Plans are wonderful for those who have a limited income and the additional returns from the plans only help them to get some extra cash on their hands at the beginning of the month. Here are five monthly income scheme that anyone can try out.
Bank Fixed Deposits: One of the most popular monthly income investment plans is to go for Fixed Deposits, which are extremely low risk and promises a steady return. A guaranteed interest income gives the person a fixed income each month for the duration of the FD. The interests are around 8% and go higher or lower depending on the banks and the tenure of the FD. Many banks are raising the interest on FDs and one can opt for a FD as long as for 10 years. Banks also deduct TDS at 10% on the interest incurred in case it has exceeded Rs 10,000 in a given financial year.
Post Office Monthly Income Scheme: Just like bank FDs, the post office MIS scheme is one of the safest options for the average middle class to invest in and gain steady returns each month. The Department of Posts currently offers 7.3% per annum interest, payable monthly. The maximum investment limit is 4.5 lakhs in a single account and 9 lakhs in a joint account and the scheme matures in 5 years. One can again invest in MIS after the maturity of the first account.
PM Vaya Vandana Yojana: The PMVVY is a scheme meant for senior citizens and it offers a guaranteed return of 8%. The scheme is operated by LIC and in the budget of 2018, the investment limit to this scheme had been increased from Rs 7.5 lakhs to Rs 15 lakhs. The scheme itself, which was announced to be operational for a short span of time, was also increased till March 2020. This is more of a pension scheme and the returns are paid at the end of each period, during a policy term of 10 years, payable monthly, quarterly, and half yearly, as chosen by the pensioner.
Senior Citizen Savings Scheme: This is also a scheme meant for the senior citizens but those who have taken VRS and have attained the age of 55 may also open the account, based on certain conditions. The upper limit of investment is Rs 15 lakhs and the rate of interest on an average is around 8.3%. The deposits made under this scheme are tax exempted and deduction under Section 80C of the IT Act but the interest earned is subjected to tax deductions. This is one of the most widely used investment schemes in the country and the government is trying to bring as many senior citizens under the scheme as possible.
Mutual Funds: One of the best high return investment plans today is through mutual funds and the Systematic Withdrawal Plans of mutual funds help investors specify a certain amount as monthly payout. On a pre- designated date, the units amounting to that amount are redeemed and although some mutual funds offer dividend options, they are not guaranteed, which makes the point system more popular. Some also prefer investments in debt funds and they are considered long term if they exceed three years. They are however taxed at 20%, but investors still get the benefit of indexation on their original investment, meaning that the inflation is adjusted with the scheme.
