If you are looking at regular income, there are many banks that are offering the same, at a discounted rate. However, the interest rates are very low, though they offer some safety.
The one disadvantage of a bank monthly income scheme is that the interest rates are very low. You may end-up getting as low as 7 per cent, but, that again depends on the tenure of the bank monthly income plans. In any case, here are some of them that we have mentioned.
Allahabad Bank Monthly Income Plan
The Allahabad Bank Monthly Income plan can be opened for monthly income and is best suited for the needs of retired individuals. You can place the deposit for 60 months and the minimum deposit is Rs 1000 under the scheme.
Remember, that bank monthly income will attract the same level of tax as other Fds. So, be prepared for a TDS, if your annual interest crosses Rs 10,000 every month.
Union Bank Monthly Income Scheme
This scheme offers an interest rate, which is again at the discounted rate. Again, interest rates are payable monthly and would vary according to the tenure. Senior citizens are entitled to an extra interest rate. Deposits under the scheme can be placed for a period of up to 10 years.
UCO Bank Monthly Income Scheme
A few years ago, the UCO Bank monthly income scheme was very attractive. However, lately the scheme has been modified, since the last time it offered very high interest rates.
Interest rates on the bank's monthly income scheme, which were as high as 9 per cent, three years ago have come down dramatically.
PNB Monthly Income Scheme
PNB also has a monthly income scheme, that offers a monthly interest at discounted rates.
Again, this is just like any other government scheme. Interest rates are pretty much competitive to what you would get at any other government banks.
Bajaj Finance Monthly Income Scheme
If you are looking for higher interest rates, try this NBFC for monthly income. This monthly income scheme from Bajaj Finance offers you an interest of 8.14 per cent on a 24-60 month deposit. This is not bad at all.
We were forced to shift slightly from a Bank Monthly Income scheme, to an NBFC, purely because we believe that there is scope for higher interest rates in these schemes along with NBFCs.
We believe that there are limited options, at the moment for bank monthly income plans to deliver good returns.
If you want slightly better returns, we suggest that you use the quarterly income scheme. This would give you better returns. Secondly, we also suggest that you move money frombank deposits, to deposits by high quality NBFCs. We wish to emphasize, that go in for the AAA rated company deposits only. Remember, that company deposits are not very safe and hence, look only for safe company deposits only.