How to Invest 50 Lakhs to Get Fixed Monthly Income

‘How to invest 50 lakhs for monthly income’ is a question that many individuals, especially those nearing or post-retirement, often grapple with. 

The answer to this question depends significantly on your risk appetite. High-risk individuals typically pursue avenues with potentially higher returns, albeit with more market volatility. Low-risk individuals, on the other hand, prioritise safety and are more inclined to explore options that assure consistent returns with minimal risk.

For those pondering over how to invest 50 lakhs after retirement, this article offers a comprehensive guide on the best avenues for investing INR 50,00,000 as per different risk appetites.

How to Invest 50 Lakhs for Monthly Income?

Some of the best investment options are listed below -

Post Office Monthly Income Scheme (POMIS)

The POMIS is a government-backed scheme, tailor-made for investors seeking a stable monthly income.

Features and Benefits

• Maximum Deposit: INR 4,50,000 for single accounts and INR 9,00,000 for joint accounts
• Interest Rate: 6.6% per annum
• Duration: 5-year deposit tenure
• Guaranteed Safety: Risk-free as it is backed by the Indian government

Government Bonds

Government bonds are debt securities issued by the government. These bonds are ideal for conservative investors.

Features and Benefits

• Risk Profile: Low-risk
• Duration: Varies from 5 to 40 years
• Payment: Offers monthly interest or coupon payments
• Maturity: Bonds have a defined maturity date

Corporate Deposits

These are deposits primarily offered by non-banking financial institutions and housing finance companies.

Features and Benefits

• Risk Profile: Higher risk compared to bank deposits
• Interest Rate: Typically higher due to increased risk
• Due Diligence: Essential to check the credit ratings of HFCs and NBFCs before investing

Senior Citizen Savings Scheme (SCSS)

SCSS is a dedicated savings scheme for senior citizens offered by Indian banks and post offices.

Features and Benefits

• Eligibility: The investor must be 60 years old or above.
• Interest Rate: 7.4% annually, payable quarterly
• Maximum Deposit: Up to INR 15 lakhs

Fixed Deposits (FD)

FDs are time deposits with banks, offering guaranteed returns upon maturity.

Features and Benefits

• Wide Availability: FDs can be opened with public or private sector banks.
• Diversification: One can spread out deposits across multiple banks like ICICI, Axis Bank, Kotak Mahindra, HDFC, and so on.
• Potential Returns: Investment across multiple banks can yield INR 30,000 to INR 35,000 as monthly income.

Monthly Income Plans by Insurers

Various insurance companies offer plans specifically designed to generate monthly income.

Features and Benefits

• Customisable Premiums: As per the age, income, and requirements of policyholders
• Popular Plans: The list includes Bharti AXA Monthly Income Plan Plus, Canara HSBC Bank of Commerce life insurance Smart Monthly Income Plan, and others.

Systematic Investment Plans (SIP)

SIP is an investment strategy where an individual invests a fixed amount in a mutual fund scheme at regular intervals.

Features and Benefits

• Flexible: Choose your interval — monthly, quarterly, and so on
• Rupee Cost Averaging: Helps in reducing the average cost of investment over time
• Convenience: Automated process, reducing the need to time the market

Annuity Plans

Annuity plans are financial products that guarantee a fixed sum of money annually.

Features and Benefits

• Regular Income: Provides a steady flow of income after retirement
• Variety: Multiple options like immediate annuity, deferred annuity, and more

Concluding Insights

If you want a regular stream of income from your funds, understanding how to invest 50 lakhs for monthly income is important, particularly for those at the cusp of or post-retirement. With myriad options available, each offering unique advantages, the right choice often hinges on individual risk preferences and financial goals.

Whether you're drawn towards the assured returns of the Post Office Monthly Income Scheme or the steady reliability of 50 lakh FD interest per month, the ultimate aim is to secure consistent monthly income.

The journey of discovering where to invest 50 lakhs culminates not just in monetary gain but also in the peace of mind that comes with well-planned investments. As you tread this path, always align your choices with your long-term vision and financial aspirations.