For most Indians, receiving a steady stream of monthly income from investments can provide added financial security and peace of mind. If you have some additional savings lying around unused, investing it in schemes that give monthly returns can convert those amounts into a constant stream of cash. A peek at India’s top ten investments in 2025 for creating monthly income is below.
Top 10 Monthly Income Plans
| S.No. | Plan Name |
|---|---|
| 1 | Senior Citizen Saving Scheme (SCSS) |
| 2 | Post Office Monthly Income Scheme (POMIS) |
| 3 | Long-Term Government Bonds |
| 4 | Corporate Deposits |
| 5 | Monthly Income Mutual Funds (MIPs) |
| 6 | Pradhan Mantri Vaya Vandana Yojana (PMVVY) |
| 7 | Life Insurance–Linked Savings Plans |
| 8 | Systematic Withdrawal Plans (SWP) |
| 9 | Equity Share Dividends |
| 10 | Annuity Plans |
Why Choose a Monthly Income Plan?
- Regular Cash Flow
You get a fixed amount every month, helping cover expenses or supplement your salary or pension. - Peace of Mind
Knowing you’ll receive income even when markets dip reduces stress. - Avoid Idle Funds
Your savings start working for you instead of just sitting in a bank account.
Brief Overview of Each Plan
1. Senior Citizen Saving Scheme (SCSS)
- Who it’s for: Individuals aged 60 and above (or early retirees).
- Interest rate: 8.2% per annum, paid quarterly.
- Tenure: 5 years (can be extended by 3 more years).
- Investment limit: Up to ₹15 lakh.
- Key point: Backed by the government; interest is taxable.
2. Post Office Monthly Income Scheme (POMIS)
- Who it’s for: Any Indian resident.
- Interest rate: 7.4% per annum, paid monthly.
- Tenure: 5 years (renewable).
- Investment limit: ₹4.5 lakh single, ₹9 lakh joint.
- Key point: Safe, small minimum deposit of ₹1,500.
3. Long-Term Government Bonds
- Who it’s for: Risk-averse investors.
- Interest rate: Varies, paid semi-annually or monthly.
- Tenure: 5 to 40 years.
- Key point: Extremely low risk, backed by the Government of India.
4. Corporate Deposits
- Who it’s for: Those seeking higher returns than bank FDs.
- Interest rate: Typically above 7% per annum, paid monthly or quarterly.
- Key point: Higher risk than government schemes; check the company’s credit rating before investing.
5. Monthly Income Plans (MIPs)
- Type: Debt-oriented mutual funds with a small equity component.
- Payouts: Declared as dividends when the fund makes profits.
- Key point: Not guaranteed—returns depend on market performance.
6. Pradhan Mantri Vaya Vandana Yojana (PMVVY)
- Who it’s for: Senior citizens aged 60 and above.
- Interest rate: 7.4% per annum, choice of monthly, quarterly, half-yearly, or annual payouts.
- Tenure: 10 years.
- Investment limit: Up to ₹15 lakh.
7. Life Insurance–Linked Savings Plans
- Who it’s for: Those wanting insurance plus income.
- Payouts: Guaranteed monthly income after the policy’s lock-in period.
- Key point: Combines life cover with regular payouts.
8. Systematic Withdrawal Plans (SWP)
- Who it’s for: Mutual fund investors seeking periodic withdrawals.
- How it works: You redeem a fixed amount each month from your fund units.
- Key point: Gives flexibility—withdraw only what you need.
9. Equity Share Dividends
- Who it’s for: Investors willing to take higher risk for higher yields.
- Payouts: Dividend payments depend on a company’s profit and board decision.
- Key point: Dividends are not guaranteed, and stock prices can fluctuate.
10. Annuity Plans
- Who it’s for: Retirees wanting guaranteed income.
- Types: Immediate (starts right away) or deferred (starts after a set period).
- Key point: Income is guaranteed but may carry high fees and limited liquidity.
Factors to Consider Before Investing
- Interest-Rate Trends: High market rates can lower the value of existing schemes.
- Your Financial Goals: Do you need capital preservation, growth, or pure income?
- Risk Appetite: Government schemes vs. corporate deposits vs. equity dividends.
- Tax Implications: Some incomes are fully taxable; others offer tax benefits.
- Liquidity Needs: How soon will you need access to your money?
Making the Right Choice
No one plan suits all. If you’re retired and prioritize security, SCSS or PMVVY could be suitable. If you can afford to take a little more risk, go for corporate deposits or dividend income from equity. For flexibility, SWPs allow you to change amounts when necessary.
Begin by setting out your monthly cash requirements, the risk you are willing to take, and how long you need to keep your funds invested. Next, compare funds on rate, security, tax treatment, and liquidity. A well-balanced combination—combining government-backed schemes with some higher-yielding ones—tends to be best.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Always consult a certified financial planner before making investment decisions.
