The need for regular monthly income is universal, as it helps individuals meet daily expenses without relying on others. The security of knowing that you will receive a fixed amount of money every month can ease financial pressures, whether it’s for personal needs, family care, or retirement. This is why many people look for investment options that offer regular income. There are various market-linked and non-market-linked schemes designed to generate steady monthly income. Explore the best investment schemes for 2025, including Post Office MIS, SCSS, and more.
Explore the best monthly income schemes for 2025, from APY to SWP and annuity plans for guaranteed financial returns. In this article, we will explore 10 popular investment schemes that provide regular monthly income, discuss their features, benefits, and eligibility, and answer frequently asked questions to help you make informed decisions.
Post Office Monthly Income Scheme (MIS)
The Post Office Monthly Income Scheme (MIS) is a government-backed investment option designed for individuals who seek a stable and secure source of income. The scheme guarantees fixed returns, making it an attractive choice for conservative investors.
Key Features:
- Interest Rate: 7.4% per annum, paid monthly.
- Investment Limit: Up to ₹9 lakh for individual accounts and ₹15 lakh for joint accounts.
- Monthly Income: An individual’s maximum monthly income is ₹5,550 and ₹9,250 for a joint account.
- Tenure: 5 years, after which the account can be closed or renewed.
Why Choose This Scheme?
- It is risk-free because the Indian government backs it.
- It provides a fixed income, making it ideal for retirees or anyone looking for guaranteed monthly earnings.
- It is a simple way to invest without any market risk.
Senior Citizens Savings Scheme (SCSS)
The Senior Citizens Savings Scheme (SCSS) is specifically designed for senior citizens who want to earn a regular income during their retirement years. This scheme offers competitive interest rates and the safety of a government-backed investment.
Key Features:
- Interest Rate: 8.2% per annum, paid quarterly.
- Investment Limit: A maximum of ₹30 lakh can be invested.
- Quarterly Income: If you invest ₹30 lakh, you will receive ₹61,500 as quarterly income.
- Tenure: 5 years, which can be extended for another 3 years.
Why Choose This Scheme?
- It offers one of the highest interest rates available among post-office schemes.
- It is a safe investment option with government backing.
- Ideal for senior citizens who rely on monthly or quarterly income.
- Offers flexibility in extending the tenure.
Atal Pension Yojana (APY)
The Atal Pension Yojana (APY) is a government pension scheme launched for workers in the unorganized sector who do not have access to regular pension schemes. This scheme ensures a fixed monthly pension upon reaching the age of 60.
Key Features:
- Pension Amount: Depending on your contribution, the scheme guarantees a monthly pension of ₹1,000, ₹2,000, ₹3,000, ₹4,000, or ₹5,000.
- Eligibility: Individuals between 18 and 40 years old can join this scheme.
- Contribution: Contributions depend on the desired pension amount and the age at which you join the scheme.
Why Choose This Scheme?
- It is an excellent option for individuals in the unorganized sector who do not have any other source of retirement income.
- It guarantees a pension, even if returns on your contributions are insufficient.
- Government contribution ensures you will receive a pension, even if your contributions are low.
Systematic Withdrawal Plan (SWP)
A Systematic Withdrawal Plan (SWP) is an investment strategy that allows investors to withdraw a fixed amount of money from their mutual fund investments monthly. This option is perfect for those who have already accumulated a lump sum and wish to create a steady income stream.
Key Features:
- How It Works: The investor makes a lump sum investment in a mutual fund, and the fund house sells units periodically to match the prefixed withdrawal amount.
- Market Conditions: The number of units sold may vary based on market conditions. If the market performs well, fewer units will be sold; if the market is down, more units will be sold to meet the monthly withdrawal.
- Taxation: SWP withdrawals are subject to capital gains tax, depending on the holding period.
Why Choose This Scheme?
- This option provides investors with growth potential (through the mutual fund) and regular income (through withdrawals).
- Offers flexibility with the withdrawal amount and frequency.
- It is ideal for those who want their investments to grow while receiving regular payouts.
Income Distribution cum Capital Withdrawal (IDCW)
The Income Distribution cum Capital Withdrawal (IDCW) plan allows investors to receive regular income from mutual fund investments. It is designed for individuals looking to benefit from both income distribution and capital withdrawal.
Key Features:
- Income and Capital: IDCW payments combine income distribution and capital withdrawal, allowing the investor to receive regular income even if the mutual fund does not generate profits.
- How It Works: The mutual fund distributes profits among its investors, but the payouts come from capital and income, ensuring a regular return.
Why Choose This Scheme?
- It is ideal for those who require a steady income stream without liquidating their holdings.
- It offers flexibility, as investors can choose the frequency of payouts.
- Even if the mutual fund performs poorly, investors can still receive income.
Annuity Plans
Life insurance companies offer annuity plans, which provide fixed monthly income after a lump sum investment. There are two types of annuity plans: immediate annuity and deferred annuity.
Key Features:
- Immediate Annuity: Provides immediate income after investment.
- Deferred Annuity: Provides income after a fixed period per the policyholder’s choice.
- Fixed Monthly Payouts: The income received depends on the investment and the type of plan chosen.
Why Choose This Scheme?
- It provides a guaranteed income, which can be crucial for retirees.
- The payout is predetermined, providing financial stability.
- Flexible in terms of payment frequency and options.
Fixed Deposits (FDs)
Fixed Deposits (FDs) are one of the safest investment options available in India. They provide a guaranteed interest rate and a fixed income at regular intervals, depending on the investor’s preference.
Key Features:
- Interest Rate: Varies between 5% to 7%, depending on the bank and tenure.
- Tenure: Varies from a few months to several years.
- Income Options: You can receive monthly, quarterly, or yearly payouts.
Why Choose This Scheme?
- FDs are considered low-risk investments, making them ideal for conservative investors.
- Provides guaranteed returns with no exposure to market risk.
- Offers flexible income payout options (monthly, quarterly, etc.).
Rental Income from Property
Investing in real estate can provide steady monthly rental income. This is particularly suitable for individuals with the capital to invest in property.
Key Features:
- Steady Income: Rental income can provide a fixed monthly cash flow.
- Property Appreciation: The property may also appreciate over time, offering potential capital gains.
- Tax Benefits: Property owners can claim tax deductions on mortgage interest and other related expenses.
Why Choose This Scheme?
- Provides both income and capital appreciation.
- Long-term investment option with potential for substantial returns.
- Tax benefits can help reduce overall costs.
Bonds
Bonds are debt instruments issued by governments or corporations to raise funds. Bond investments allow investors to earn a fixed income over a specified period.
Key Features:
- Interest Rate: Varies depending on the bond type, ranging from 5% to 7%.
- Income Frequency: This can be monthly, quarterly, or annually.
- Capital Preservation: Bonds generally offer low risk and are safer than equities.
Why Choose This Scheme?
- Bonds are a stable, low-risk investment option.
- They offer predictable returns, making them suitable for income-seeking investors.
- Government bonds provide added security, while corporate bonds may offer higher yields.
Public Provident Fund (PPF)
The Public Provident Fund (PPF) is a long-term, tax-saving scheme that offers a fixed interest rate. While it does not provide monthly income during the term, the maturity amount can be a significant income source in the future.
Key Features:
- Interest Rate: 7.1% per annum, compounded annually.
- Investment Limit: A maximum of ₹1.5 lakh per year.
- Tax Benefits: Contributions to PPF are eligible for tax deductions under Section 80C.
- Maturity: The investment matures in 15 years, and the proceeds are tax-free.
Why Choose This Scheme?
- Provides tax benefits and long-term financial security.
- The interest rate is attractive and compounded annually, allowing the investment to grow.
- A reliable retirement tool when the full maturity amount is withdrawn.
Conclusion
Discover the best monthly income schemes such as Post Office MIS, SCSS, and more for secure returns. Regular monthly income ensures financial stability, whether for retirement or daily expenses. From Post Office MIS and SCSS to SWP and IDCW, each investment option caters to different risk profiles and income requirements. Evaluating each scheme’s features, benefits, and limitations is essential to selecting the best one that aligns with your financial goals. Secure your financial future with monthly income schemes.
By diversifying your investments across multiple schemes, you can create a well-rounded portfolio that generates consistent income while balancing risk and returns. It’s also wise to consult a financial advisor to determine which scheme suits your specific needs, especially if you are planning for long-term financial security.
FAQs
Q: Which scheme provides the highest return?
A. The Senior Citizens Savings Scheme (SCSS) offers an interest rate of 8.2%, one of the highest returns among low-risk government-backed schemes.
Q: Can I change the frequency of my withdrawals in the Systematic Withdrawal Plan (SWP)?
A. The withdrawal frequency in an SWP is generally fixed, but some mutual fund houses may offer flexibility. It is best to confirm the options with the fund house.
Q: Is the Atal Pension Yojana (APY) available to everyone?
A. APY is available to all Indian citizens between 18 and 40. However, it is mainly intended for workers in the unorganized sector who do not have any other source of pension.
Q: How is the income from the Senior Citizens Savings Scheme taxed?
A. The interest earned from SCSS is taxable and will be subject to tax based on your income tax slab.
Q: Can I withdraw my PPF amount before maturity?
A. You can partially withdraw from your PPF account after 6 years, but the full maturity benefit can only be accessed after 15 years.
