Achieving a steady monthly income of ₹20,000 is a common financial goal for many. One effective way to accomplish this is by investing in specific schemes designed to provide regular returns. In this article, we’ll explore various investment options that can help you achieve this target, ensuring both safety and profitability.
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Post Office Monthly Income Scheme (POMIS)
The Post Office Monthly Income Scheme (POMIS) is a government-backed savings plan that offers investors a fixed monthly income. It’s a safe and reliable option, especially for those seeking regular returns without exposure to market risks.
- Interest Rate: 7.4% per annumWikipedia+1Aditya Birla Sun Life Insurance+1
- Investment Limit: Up to ₹4.5 lakh for individual accounts and ₹9 lakh for joint accounts
- Lock-in Period: 5 years
How to Achieve ₹20,000 Monthly Income with POMIS:
To earn ₹20,000 per month, you would need to invest approximately ₹32.5 lakh. Here’s the calculation:
- Annual Interest: ₹32,50,000 × 7.4% = ₹2,40,500
- Monthly Interest: ₹2,40,500 ÷ 12 = ₹20,041.67
However, given the investment limits, you would need to open multiple accounts, possibly in the names of family members, to reach the desired investment amount.
Senior Citizens Savings Scheme (SCSS)
The Senior Citizens Savings Scheme (SCSS) is tailored for individuals aged 60 and above, providing a secure investment avenue with attractive returns.
- Interest Rate: 8.2% per annumGroww
- Investment Limit: Up to ₹15 lakh
- Lock-in Period: 5 years
- Tax Benefits: Interest earned is taxable, but investments qualify for deduction under Section 80C of the Income Tax Act.
How to Achieve ₹20,000 Monthly Income with SCSS:
To earn ₹20,000 per month, you would need to invest approximately ₹29.27 lakh. Here’s the calculation:
- Annual Interest: ₹29,27,000 × 8.2% = ₹2,40,014
- Monthly Interest: ₹2,40,014 ÷ 12 = ₹20,001.17
Since the maximum investment per individual is ₹15 lakh, a couple could jointly invest ₹30 lakh to achieve the desired monthly income.
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Monthly Income Plans (MIPs)
Monthly Income Plans (MIPs) are mutual fund schemes that aim to provide regular income to investors by investing a significant portion in debt instruments and a smaller portion in equities.
- Expected Returns: Approximately 8% per annum (subject to market conditions)
- Investment Horizon: Medium to long term
- Risk Factor: Moderate, due to partial equity exposure
How to Achieve ₹20,000 Monthly Income with MIPs:
To earn ₹20,000 per month, you would need to invest approximately ₹30 lakh. Here’s the calculation:
- Annual Returns: ₹30,00,000 × 8% = ₹2,40,000
- Monthly Returns: ₹2,40,000 ÷ 12 = ₹20,000
It’s important to note that returns from MIPs are not guaranteed and can fluctuate based on market performance.
Annuity Plans
Annuity Plans are financial products offered by insurance companies that provide regular payouts in exchange for a lump-sum investment. They are particularly beneficial for individuals seeking a stable income stream during retirement.
- Payout Frequency: Monthly, quarterly, or annually
- Returns: Vary based on the plan and prevailing interest rates
- Taxation: Depends on the specific plan and applicable tax laws
How to Achieve ₹20,000 Monthly Income with Annuity Plans:
The required investment depends on the annuity rates offered by the insurer. For instance, to receive ₹20,000 per month, you might need to invest around ₹30 lakh, depending on the specific plan and prevailing interest rates.
Systematic Withdrawal Plans (SWP)
A Systematic Withdrawal Plan (SWP) allows investors to withdraw a fixed amount from their mutual fund investments at regular intervals, providing a steady income stream.
- Flexibility: Investors can choose the withdrawal amount and frequency
- Tax Efficiency: Only the capital gains portion of the withdrawal is subject to tax
- Risk Factor: Depends on the
(FAQs)
Q1. Can I combine different schemes to achieve ₹20,000 monthly income?
Yes, absolutely. Combining multiple schemes such as POMIS, SCSS, and MIPs is a smart strategy. For instance, a couple can invest in SCSS and POMIS jointly and balance the remaining amount in Monthly Income Plans or Systematic Withdrawal Plans (SWPs) to meet the ₹20,000 monthly income target.
Q2. Which scheme is the safest for guaranteed monthly income?
Post Office Monthly Income Scheme (POMIS) and Senior Citizens Savings Scheme (SCSS) are among the safest, as both are backed by the Government of India. These schemes offer fixed returns and are not affected by market volatility.
Q3. Are there any tax benefits with these schemes?
Yes. SCSS and NSC (National Savings Certificate, not covered in this article but worth noting) offer tax deductions under Section 80C. However, the interest earned from these schemes is taxable. POMIS does not provide tax deductions, but the capital remains secure.
