To Buy: 1800-258-5899 (9 am to 6 pm)

|

customerservice@canarahsbclife.in

|

Locate Branch

Login

How and where to invest to get a guaranteed monthly income?

dateKnowledge Centre Team dateFebruary 01, 2021 views210 Views
How and where to invest to get a guaranteed monthly income?

Regardless of whether you're searching for strategies to enhance your regularly scheduled check, or are meaning to save for retirement, there are a lot of ways by which you can invest your cash and earn a predictable monthly revenue.

One of the effective ways of gaining a monthly income is by investing in instruments that will passively payout regularly. There are various ways to deal with making side earnings. Some require substantial personal equity to start with, and others require more regular degrees of commitment.

Therefore, you must invest in monthly income schemes to get an assured revenue every month.

What are Monthly Income Schemes?

The monthly income scheme approach is term deposit where the interest earned is credited directly to the investors account after a certain duration mostly per month. It provides the option of premature withdrawal, overdraft facility etc.

This is done to earn smooth returns and capitalize on the investment whenever feasible through equity exposure.

What are the key features and benefits of Monthly income through various schemes?

The following characteristics and advantages of the best guaranteed monthly income plan make it a feasible investment alternative for risk-averse investors

  • Safety: Investing your hard-earned excess money in saving schemes will help you conserve it for your future requirements.
  • Long-Term Advantages: The shortest lock-in period of these policies is five years. The utmost it can go until you attain the age of 60 years; the compounding of returns, coupled with long-term savings, will earn you income on interest and end up as an enormous amount of maturity.
  • Open-ended option: Monthly Income is an open-ended scheme. People do not have to pay any processing tolls as an entry load for permeating the scheme. Besides, it comes with an exit-load that is less than 1% of the entire investment amount.
  • Guaranteed income: Investors are guaranteed to earn positive retrievals each month, despite the quantum of the sum fluctuating banking on the financial market.
  • Lower-risk: It is because money is invested in low-risk insurances like preferred shares, fixed-income deposits and dividend stocks.

Given are the best investment options to help you get a regular income

Post Office Monthly Income Scheme:

For those investors with a zero-tolerance for any hazard and desires of earning continuous income, the Post Office Monthly Income Scheme is one of the promising available alternatives. The interest is 7.6 percent annually.

Although the maturity term for this policy is five years, you can revoke earlier if you complete one year of deposit. Here you can invest up to ₹4.5 lakhs in a personal account and up to ₹ 9 lakhs in a combined account.

Withdrawing between 1 to 3 years of deposit leads to a 2% deduction. If you relinquish between 3 years to 5 years, it results in a deduction of 1% of the whole amount deposited. On maturity, you will get back your principal amount along with a 5% gratuity amount.

Stocks, Bonds & ETFs

Exchange-traded Funds (ETFs) pay all kinds of dividends and stand some of the most straightforward ways of fixing investors up with a form of passive income regularly. Dividends are paid every quarter and monthly, and it is wise to invest here due to handsome profits.

Bonds are investments that can be augmented to investor portfolios, and they act like a form of agreement between the issuer and the investor. The lender will generally receive interest back with their investment regularly.

ETFs have grown to become famous among investors who aim to seek out varied portfolios within a particular industry – like healthcare or emerging technologies.

When seeking out value investments, it's worth selecting stocks that are competent in offering up dividends. An interesting fact is that $80 trillion is the global stock market value, and the current stock market has been going on for a record ten years!

The global stock exchanges have a capitalization of USD 85 trillion. This is a tremendous boost of 320% since 2009.

If not comfortable with stock market investing, it could be worth discussing with a financial advisor who can steer the way, using experience and fresh ideas.

Corporate deposits

Corporate deposits are offered by several Non-Banking Financing Companies (NBFCs) as well as lodging finance companies. These firms offer interest either on a monthly, quarterly or a half-yearly basis. The suitable strategy here would be to diversify your undertakings and invest in various high-ranking corporations' funds. Also, they have distinct interest ratios for senior citizens varying between 0.25% and 0.5%.

While corporate deposits are an incredible option, you should always examine the credibility and financial value (as per CRISIL standards) of an organization before capitalizing in it.

Equity Share Dividend:

This alternative enables for investment profits over the long term and the commitment of a regular income, but the risk factor is a bit high. You are required to create a diverse portfolio incorporating multiple stocks to stimulate a high dividend payout ratio. Since you obtain dividends on profits and not on capital, there is a greater-than-average possibility of firms not paying regular dividends.

Annuity:

Indian insurance corporations are known to offer annuity policies that offer low risk and a guaranteed monthly income. You can wield this as a retirement scheme by making a lump sum investment to reap income at predictable intervals. The major method of categorizing annuity plans is founded on the payment period's duration and is split into Deferred annuity and Immediate annuity.

A deferred annuity furnishes cash after a fixed-term period set by you, say a month. In contrast, Immediate annuity includes receiving regular revenue as soon as you earn the lump sum payment. However, remember that there are numerous charges involved in annuity investment, which incorporate commission and surrender fees. It is also taxable and does not result in any tax benefits.

Mutual Fund Monthly Income Plan:

This policy is suitable for beating inflation, provided you are willing to take an intermediate amount of risk. The ratio is usually 20% to 30% investment in equity securities, and 80% to 70% in debt instruments like deposit certificates. A good term for this plan is between 2 to 3 years, and you can earn a monthly revenue by electing a dividend-payout option. However, the equity component makes it hard to obtain regular dividends because dividends are only paid on profits and not capitalized equity.

In this policy, you can select a specific amount you wish as a monthly payment for your investment. So, every month on a designated date, units corresponding to that amount would be compensated. Unlike dividends (that depend on earnings made by funds), this scheme ensures a regular revenue.

Senior Citizen Saving Scheme

The senior citizen saving scheme is formulated for senior citizens that are individuals of 60 years and above can invest.

This is a low-risk and high-return investment policy that can provide outstanding financial support for retired people in their old age. The scheme comes with an interest rate of 9%, and interest income is reimbursed after the 3-month duration throughout the year. The senior citizen saving policy is given both by banks and post offices throughout the nation. However, it must be availed within the first month of obtaining the retirement benefit and also the deposit must not surpass the benefit received. While the policy's maturity term is five years, it can be expanded by another three years.

Monthly Income Plans

Monthly income plans (MIPs) are mutual fund plans; one of the best guaranteed monthly income plans. The fund houses to payout their investors with a sum monthly. This amount is not stabilized and varies as per the performance of the fund in the market. Since the performance drives the retrievals, therefore, it is never assured. Also, there are likelihoods of unfavourable returns as well. Hence, before deciding to capitalize on a monthly income plan, you must dim your profile.

A monthly income scheme's approach is mainly debt-oriented as over 70% – 80% of its fund goes into debt funds, while the remnant goes into stock alternatives.

There are two types of investment choices that can be categorized as the best monthly income schemes. These offer alternatives to earn dividends and expedite guaranteed wealth creation. The two types are –

  • Dividend-oriented monthly investment plan: The revenue produced through such plans are in the form of dividends. No tax is imposed on the dividend reimbursed to the people. Such dividends are paid from the distributable abundance and are paid when the said fund is earning gains from the market.
  • Growth-oriented monthly income plan: Through this plan, revenue accrued on the equity gets augmented to the invested amount. It stimulates wealth production along with corpus expansion.

Given above is a list of some of the best investment and income schemes to earn a guaranteed monthly revenue. Now it's your turn to take charge and start capitalizing in them for a stable and secure future ahead!

Whether you're creating a nest egg for the future or willing to create an additional revenue stream through monthly passive earnings, smart monthly income plans can wholly reward investors for the time they're willing to put into an undertaking with a decent revenue stream that can help them to accomplish their objectives.

Related Articles

Browse by Categories

Get a Call Back

Do you want us to call back Please fill the form below

Annual Income (In Lacs)

Our Products

TERM Insurance PLAN

TERM Insurance PLAN

Whole life cover option available

Increase your life cover with changing life stages

Return of premium & in-built protection options

Multiple premium payment options

Avail tax benefits on premiums paid as per tax laws

ULIP PLAN

Unit Linked Insurance Plan

8 funds and 4 portfolio strategies to invest

Loyalty additions and wealth booster

Return of Mortality Charge is available on Maturity under all three cover Options

Flexibility of switching between the fund options to take benefits of market movements or change in risk preference

Pos Easy Bima Plan

Top Benefits

Hassle free

Get double life cover in case of accidental death

Choice of flexible premium payment and policy term

Avail tax benefit on premium paid

Frequently Asked Questions (FAQs) for Term Insurance

This being a term plan doesn't offer any payout after maturity or expiration date.

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 70 years of age.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly.

If your key purpose is to give your Family financial protection, go for the term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, a term plan pays a part of the sum insured to treat your disease.

Term insurance riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term policy remains active until the expiration date.
  • Income Rider: The rider ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while buying Term Insurance?

  1. 1. Amount of premium you have to pay based on your age, habits, education, and monthly income
  2. 2. The total number of benefits covered in the term plan. Do they include benefits that you care about the most?
  3. 3. How to save money on tax if you pay for the term plan?
  4. 4. Do they offer regular income options?
  5. 5. Can you change the coverage and premium in the future?
  6. 6. Does the claim consider valid if death occurs outside India?
  7. 7. Which kind of death is not covered by insurance?
  8. 8. Can NRIs take term insurance? If yes, what are the conditions?
Call BackCall Back Pay PremiumPay Premium