Monthly Income Scheme options in 2022 | Aviva India

Monthly Income Scheme options in 2022

Monthly Income Scheme options

A monthly income gives us the certainty of an assured source of income on a monthly basis. This gives a certain financial guarantee, and peace of mind knowing that a certain amount will be coming in every month.

 

When we retire we lose this assurance. However with a monthly income scheme, which is kind of an investment scheme, an investor invests a certain amount and receives the returns on investment periodically. There are different kinds of monthly income schemes available like a monthly income scheme in banks, SCSS, POMIS, SWP mutual funds etc. 

 

These investment schemes have different terms and conditions, risks, features etc.  But they have one thing in common which is the periodic withdrawal income. They are either backed by the government or managed by a fund manager.

 

These kind of schemes are very easy to invest in and can give you the assurance of a monthly income even after you retire.

Different Types of Monthly Income Schemes

Let’s look at a few different types of monthly income schemes and their features and benefits.
  • Monthly Income Fixed Deposit

This kind of a monthly income option is among the most common and popular investment options. Fixed deposits have a certain specified lock-in period and interest income that gets accumulated. When you, the investor, invests in a fixed deposit, your investment amount gets locked in for the tenure specified in the FD you choose and you then receive the interest earned out in the form of regular payouts. These can be on a monthly, quarterly, half-yearly or yearly basis whichever you prefer.

One of the features of this kind of monthly income scheme in banks is that the interest rate is lower than that of a regular fixed deposit. The interest rate is pre-determined and guaranteed by the bank and thus a monthly income fixed deposit is a reliable and steady source of income for those looking for financial stability.

  • Post Office Monthly Income Scheme

As the name suggests, the post office monthly income scheme is a government sponsored scheme. It is offered and regulated by the Department of Post, Indian Post. They review the interest rate every quarter and update it if need be. The interest rate fluctuates based on the returns yielded by the Government Bonds of the same tenure. Since April 2020, the interest rate has been 6.60% for this scheme.

As the scheme is regulated by the Government of India, the interest rate in this monthly income option is guaranteed with very little scope of credit risk.

  • SWP Mutual Funds

A systematic withdrawal plan allows an investor to withdraw a fixed amount periodically. This can be either a monthly, quarterly, half-yearly or yearly period. This is an extremely flexible scheme in terms of the amount and payout tenure selection. So if you choose a monthly option this acts like a fixed monthly income plan.

You have the choice of either withdrawing a fixed amount or the capital gains on the mutual funds.

The reason why this investment scheme attracts investors is because an investor can periodically withdraw an amount and yet stay invested in the scheme. This is also offered as a monthly income scheme in banks that you can speak to your advisor about.

Conclusion

There are several other investment schemes such as corporate deposits, senior citizen savings scheme and long term government bonds. Depending on your requirement, you can invest in monthly income options of your choosing.

 

A monthly income scheme provides stability and also financial independence in your golden years so that you can continue to live the same lifestyle as you are used to. Ensure that you choose an investment option after you define your goals.

 

Related Articles:

https://www.avivaindia.com/insurance-guide/6-best-monthly-income-schemes-india

https://www.avivaindia.com/insurance-guide/how-ensure-regular-income-stream-your-family

 

 

AN July 18/22

 

 

 

 

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