November 25, 2018
While saving can help you access a corpus of funds during your retirement, having a regular income can put your pocket and mind at ease to continue living your usual lifestyle without any financial restraint. Your monthly income need not end with your employment years. You can still receive a regular monthly income by making smart financial moves. You can do this by investing in schemes that offer returns on a regular basis.
Look at 5 such Investment instruments that offer monthly earnings.
- Senior Citizens’ Saving Scheme
This scheme is a popular choice and is available only for early retirees and senior citizens. If you are above the age of 60 years, you can easily avail this savings scheme from your nearest bank or post office and receive earnings every quarter. If you are an early retiree, you will need to invest in this scheme within 1 month of receiving your retirement funds. This scheme has a five-year tenor and you can choose to extend it for an additional 3 years at the end of the tenor. You can also avail tax benefits under Section 80C and invest up to Rs.15 lakh in a Senior Citizens Saving Scheme. The current interest rate for the SCSS is 8.3%.
- Post Office Monthly Income Scheme
This scheme allows you to invest up to 4.5 lakh as a single account holder. The current interest rate of this scheme is set at 7.3% and though this is the annual rate of interest, an average of this is paid monthly. However, the interest earned under this scheme is taxable. You can also plan for the interest to be credited to the savings account you have with the same post office instead of having to visit the branch every month.
- Fixed Deposits
Fixed deposit for senior citizen offer you safe and guaranteed returns and are better than your savings account in terms of earnings. With the option of non-cumulative deposit, you can choose your interest to be paid out every month, or other periodic intervals like quarterly or annually. In order to gain from higher returns while still opting for a safe option like a Fixed Deposit, choose to invest with an NBFC like Bajaj Finance.
Here you can find FD interest rates up to 8.75% that increase by 0.25% upon renewal. Additionally, you can use online account management to keep a track of all your details. Also, you can invest as low as Rs.25,000 to start your FD. Moreover, you can use an FD calculator to predetermine your returns in order to add efficiency to your investment planning.
- Pradhan Mantri Vaya Vandana Yojana
Devised specially to benefit the senior citizens, this scheme offers you an interest rate of 8% that is payable monthly. This scheme is available up to 31st March 2020. At the time of purchase, you can choose the payout frequency from options like monthly, quarter yearly, half yearly or annually. The policy term for PMVVY is 10 years. Here, the minimum pension per month starts at Rs.1000 and the maximum pension per month can go up to Rs.10,000. However, the maximum investment limit for this scheme is Rs.15 lakh. Also, this pension scheme is exempted from GST or service tax.
- Mutual Funds
In order to gain regular income while still gaining from high returns through mutual funds, you can opt for debt mutual funds and choose the monthly dividend option. These mutual funds allocate only 10%–20% of your capital into equities while the rest is invested in safe bonds or debt instruments.
However, it is essential to remember that the returns from these mutual funds may not be as high as regular mutual funds as there is a lower risk involved. Additionally, you can invest in a systematic withdrawal plan that allows you to withdraw a fixed amount on a regular basis. You will also need to choose the date, amount and tenor in advance for this scheme.
So, consider the above options to continue receiving monthly income post retirement too.