From FDs to MIS, these 5 investment options can help secure regular monthly income

Many investors, especially the ones who have either retired or are planning to retire, look for a regular income to sustain their lifestyle. For them, there are several investment options that can ensure the safety of capital as well as provide with regular monthly income.

The first choice of the investor is fixed deposits, said Abhinav Angirish, Founder, Investonline.in while speaking to CNBC-TV18.

“Fixed deposits are offered by banks, post offices and NBFCs. NBFCs and companies offer higher returns than banks or post-office. Senior citizens get additional 0.25 percent-0.50 percent. However, these fixed deposits carry some risk of default due to sudden changes in government policy or factors that are external to the company. Presently fixed deposits offer around 5.30 percent interest per annum” he said.

FDs offer mid-high single digit interest rates on investments. The interest earned can be withdrawn on a regular basis, giving investors the option to receive an assured monthly payout.

This scheme is best for those having zero risk tolerance, Angirish said.

The interest is paid at 6.6 percent, which is payable monthly. The maximum investment limit here is Rs 4.5 lakh in single account and Rs 9 lakh in joint account. An individual can invest maximum Rs 4.5 lakh in MIS (including his share in joint accounts).

For calculation of share of an individual in joint account, each joint holder must have equal share in each joint account.

For senior citizens, this is a must-have scheme. Only senior citizens or early retirees can invest in this scheme. The interest rate on SCSS is payable quarterly and is fully taxable. Presently the scheme offers interest rate of 7.4 percent per annum, Angirish said.

Monthly income plans (MIPs) are mutual funds that invest mainly in fixed income and a small portion in equity-related instruments. The fund houses payout their investors with a steady income, regularly. This amount is not fixed and depends on the performance of the fund.

Also, there are possibilities of negative returns.

Long-term government bonds are also an option to earn a regular income. Although the maturity period is considerably long, investors can use it to earn income throughout the year. They are traded in the secondary market.