Whether it is to supplement your savings or to meet your regular expenses after retirement, generating monthly income is an important requirement for many people. While there are several options available for generating monthly income, it is important to choose one that is low-risk, stable and offers a reasonable return on investment.
In this article, we will explore the benefits and options available for generating monthly income through monthly income schemes, with a specific focus on senior citizen FD rates.
Benefits of Monthly Income Schemes
1. Regular Income: Monthly income schemes offer a regular income stream to investors, which can help supplement their income and provide them with a stable source of revenue.
2. Low-risk: Monthly income schemes are generally low-risk investments, which makes them ideal for senior citizens and other investors who prefer investments with minimal risk.
3. Fixed Return: Monthly income schemes offer a fixed return on investment, which means that investors can calculate their returns in advance and plan their finances accordingly.
4. No Maintenance Required: Unlike other investments like stocks or mutual funds, monthly income schemes do not require any maintenance. Investors do not need to monitor their investments regularly, which makes these schemes ideal for senior citizens.
5. Customizable: Some monthly income schemes offer the option of selecting the payout frequency and tenure, which makes them customizable and suitable for a wide range of investors.
Options for Generating Monthly Income
Fixed Deposits (FDs)
Fixed deposits are a popular investment option for generating monthly income. In a fixed deposit, the investor deposits a lump sum amount, which earns interest over a fixed period of time. The interest earned can then be disbursed on a monthly, quarterly or annual basis, depending on the investor’s requirement. Senior citizen FD rates are generally higher than regular FD rates offered by banks, and hence make them an attractive investment option for senior citizens who are looking for stable monthly incomes.
Mutual Funds (MFs)
Mutual funds are another investment option that offers the potential for generating monthly income. An investor can opt for mutual funds that offer dividend payout options for generating monthly income. Mutual funds that invest in debt securities are generally considered low-risk and hence suitable for investors who prefer investments with minimal risk. However, it is important to note that the returns on mutual funds can be variable and investors may not always receive a guaranteed monthly income.
Post Office Monthly Income Scheme (POMIS)
The Post Office Monthly Income Scheme (POMIS) is a low-risk investment option offered by India Post. The scheme offers a fixed monthly income to investors who deposit a lump sum amount for a fixed period of time. The POMIS is suitable for individuals who prefer investments with minimal risk as the principal amount is guaranteed and the returns are fixed.
Senior Citizens’ Saving Scheme (SCSS)
The Senior Citizens’ Saving Scheme (SCSS) is a government-backed savings scheme specially designed for senior citizens. The scheme offers a fixed rate of return and the interest rate offered is typically higher than regular savings accounts. The tenure for the scheme is five years, and the investment can be extended for a further three years. The scheme also offers senior citizen FD rates that are higher than regular FD rates offered by banks.
Annuity plans are a type of retirement plan that offers a regular income stream to investors. In an annuity plan, the investor makes a lump sum payment, which is then returned to the investor in the form of periodic payouts over a fixed period of time. Annuity plans can be customized to match the investor’s requirements and are available in various options such as immediate annuity, deferred annuity and fixed annuity.
Generating monthly income is an important requirement for many individuals, especially seniors who are looking to supplement their retirement savings. Monthly income schemes offer a low-risk, stable and attractive option for generating monthly income. Fixed deposits, mutual funds, post office monthly income scheme, senior citizens’ saving scheme, and annuity plans are some of the popular options available for generating monthly income.
Senior citizen FD rates are generally higher than regular FD rates, making them a popular investment option for seniors who are looking for stable monthly incomes. It is important to remember that each investment option has its own pros and cons and hence investors should choose an investment option that best suits their investment objectives and financial goals.