Monthly Income Scheme or MIS considered to be primarily offered by Post Office are also offered by banks. Such plans enable a regular earning on a monthly basis as interest amount on lump sum payment and are suitable for retirees or individuals with surplus funds that they can deploy in such schemes.
How are interest rates on the UCO Bank Monthly Income Scheme?
The interest rates have fallen dramatically from levels of 9 per cent plus, to a meagre 7.25 per cent for regular investors. Of course, interest rates on the UCO Bank Monthly Income Scheme has also fallen for senior citizens as well to 7.75 per cent.
How much to invest in the UCO Bank Monthly Income Scheme?
You need to invest a minimum sum of Rs 50,000 under the scheme. If you place just Rs 50,000, you are likely to get a very paltry sum by way of monthly interest, given that the scheme is offering just 7.25 per cent interest.
Remember, that if you are paying tax on the interest rate, your returns would also fall dramatically. At the moment, bank deposits, which fetch an interest rate of more than 10 per cent are subject to a TDS.
This is very unattractive rate of interest. What we would recommend investors to do is invest in the post office Monthly Income Scheme, where you get a pretty decent interest rate of 7.80 per cent.
We do not expect interest rates on post Office to fall below that of the UCO Monthly Income Scheme. Hence what we recommend is go for the post office scheme. Like UCO Bank the amount is safe, as it is backed by the government of India.
Other features of the UCO Bank Monthly Saving Scheme
The other normal features of a bank deposit would apply. For example, nomination facility and loan facility is available on the UCO Bank Monthly Income Saving Scheme.
Bank deposits have not been the best proposition in the last few years as interest rates have fallen. We suggest that those investors who are plannning to invest should invest in monthly income deposits offered by some of the Non Banking Finance Companies, also called NBFCs.