Government-Backed Investment Options For Regular Monthly Income

Post Office MIS

India Post's Post Office Monthly Income Scheme (POMIS) is a type of investment. This is a fantastic option for risk-averse investors looking for a steady stream of income. At the moment, the POMIS is offering a 7.6% interest rate. A single account can carry investments worth up to Rs 4.5 lakh, while a joint account can hold investments worth up to Rs 9 lakh. Furthermore, with a 5-year investment period, it is a very low-risk investment. You will receive not only your principal but also a 5% bonus when the bond matures. Once the POMIS investments have matured, they can be re-invested for another five years for a total of ten years.

Government Bond

A government bond is a debt instrument issued by the Indian government, including both the central and state governments. When the issuing body faces a liquidity crisis and needs funds for infrastructure development, these bonds are issued. Depending on the bond's terms, the authorised issuer may be required to pay interest and/or repay the principal at a later date when the bond matures. A bond, in simple terms, is a formal agreement to repay borrowed funds with interest at predetermined intervals. Investment bonds are a less risky investment option, so your money is safe. Bonds that can be used to raise funds are known as investment bonds. Investment bonds provide guaranteed returns, although at a lower rate than equity.If you are in a higher tax bracket, tax-free investment bonds are one of your best options.

Post Office Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme (SCSS) is a post office savings scheme for senior citizens that provides investors with security and a stable income. It's also a tax-saving approach. It's ideal for retirees looking for a low-risk investment. Section 80C of the Income Tax Act allows for a tax deduction for investments in SCSS. Interest, on the other hand, is taxed according to the individual's tax bracket. The Senior Citizens Savings Scheme requires a minimum deposit of Rs 1,000. A maximum of Rs 15,00,000 is also available. As a result, eligible investors can only invest in the specified range. The amount put into the account cannot be more than the amount received upon retirement. The current interest rate is 7.4% for the quarter of April to June (2020-2021). Every quarter, the interest rate is reviewed. It is also subject to change on a regular basis by the Ministry of Finance.

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a Government of India-sponsored pension scheme for senior citizens aged 60 and up, which was available from May 4, 2017, to March 31, 2020. The program has been extended until March 31, 2023, for a total of three years beyond March 31, 2020. The scheme's goal is to provide seniors with a regular pension. Because Life Insurance Corporation of India has been given exclusive rights to operate the scheme, it can be purchased both offline and online. The scheme offers an initial guaranteed rate of return of 7.40% per year for the years 2020-21, with the rate reset every year after that. If the pensioner lives to the end of the ten-year policy term, the purchase price and final pension instalment will be paid. A lump sum Purchase Price can be paid to purchase the scheme. The pensioner has the option of selecting either the pension amount or the Purchase Price.

Fixed Deposits MIS

Monthly income fixed-deposits are term deposits in which the interest received is credited to the investor's account each month. Individuals who want a monthly fixed income should consider this form of investment vehicle. These accounts have interest rates that are similar to those for regular term deposits. They also tend to charge senior citizens a higher interest rate, ranging from 0.25%to 0.5% higher than the current rates. IT is backed by the government to a certain amount

Non-Government Backed Monthly Income Scheme- Corporate Deposits

A corporate fixed deposit (corporate FD) is a term deposit held for a set period of time at a set rate of interest. Financial and non-banking financial institutions offer company fixed deposits (NBFCs). Fixed deposits issued by companies can have maturities ranging from a few months to a few years. Choose higher-rated corporate FDs based on the credit rating, which indicates the company's underlying risk. Corporate FDs offer more liquidity and have a shorter lock-in period than Bank FDs. They offer higher interest rates when compared to bank fixed deposits Corporate FDs offer more liquidity and have a shorter lock-in period than Bank FDs. The returns on CFDs are dependent on market fluctuations. If your interest income exceeds Rs.5,000, you'll be subject to Tax Deducted at Source (TDS).

Non-Government Backed Monthly Income Scheme- Monthly Income Plan

The Monthly Income Plan is an investment option that primarily invests in lower-risk securities and is typically designed for conservative risk-averse investors and retirees.

It provides a consistent source of income for those looking to supplement their monthly income. Monthly Income Plans primarily to generate income in the form of interest and dividends. MIP earnings are higher than those from traditional fixed deposits and the Post Office Monthly Income Scheme. MIPs have been linked to a lower risk component. Because money is invested in low-risk securities such as preferred shares, fixed-income instruments, and dividend stocks, the risk is reduced.