A steady regular income is probably something everyone strives for. Let it be those working part-time or retired personnel.
Thankfully, There are numerous investment options available that will generate regular income. Fixed Deposits have traditionally been the most preferred investment option but there are a lot more options available that offer an edge over Fixed Deposits for marginally higher risk.
The options one may consider besides Fixed Deposits are – Post Office Monthly Income Scheme, Senior Citizen Savings Scheme, Pradhan Mantri Vaya Vandana Yojana (PMVVY) and mutual funds.
The details about five investment options for a steady regular flow of income are –
Fixed Deposits (FDs)
Fixed Deposits and Government Bonds are the considered risk free assets. It has been traditionally the most commonly preferred investment tool for it guaranteed interest income.
Fixed deposits usually earn interest of 6.00% p.a. which is likely to get a hike in the near future. It is best suited for investors who prioritize low risk and a fix sum of money at a fixed rate of interest.
Post Office Monthly Income Scheme
MIS broadly known as Monthly Income Scheme. As name suggests one can get assured monthly return from investment under this scheme. Currently the rate of return under MIS is fixed 7.3%.
The maturity period for this Investment scheme is 5 years. There is also a 5% bonus at the end. It lets you invest up to 4.5 lacs for an individual account and 9 lacs for a joint account.
Pradhan Mantri Vaya Vandana Yojana
Life Insurance Corporation undertakes Pradhan Mantri Vaya Vandana Yojana or PMVVY. It is 8 percent guaranteed yearly pension scheme for senior citizens.
A current rate an investor gets a monthly interest rate of Rs. 5,000 if he/she invests Rs. 7.5 lacs in this scheme. The investment limit in Pradhan Mantri Vaya Vandana Yojana or PMVVY is currently Rs. 7.5 lacs which will supposedly be increased to Rs 15 Lacs as announced by Finance Minister Arun Jatiley for Budget 2018.
Senior Citizen Savings Scheme
As the name suggests, this deposit scheme is for a specific category of individuals. This deposit scheme is for individuals with 60 years of age or above.
Additionally, individuals retiring on superannuation or under any Voluntary Retirement Scheme (VRS) aged 55 years and above, retiring defense personnel aged 50 years or above can also open the account subject to certain conditions.
This Scheme has a maturity of 5 years, which is extendable by 3 years. The rate of return offered in this scheme is 9 % per annum. The Interest income is paid every 3 months.
Mutual Fund Investments
Mutual Funds are the most popular method to invest in India. The Investment in equity or debt mutual funds can generate regular monthly income from mutual funds by selecting SWP (systematic withdrawal plan).
This method of investment is preferred over Fixed Deposits as they provide superior returns at marginally higher risk. Under SWP, A specified certain fixed amount is paid as a monthly payout.