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Monthly Income Plan
A monthly income plan, or MIP, is a financial product designed to provide NRI investors with a regular stream of income every month. The main objective of a monthly income plan is to generate a stable cash flow for individuals who rely on regular income to meet their expenses.
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- Best Monthly Income Funds for NRI/ OCI/ PIO in 2024
What are Monthly Income Plans? (MIPs)
A Monthly Income Plan is an investment option that offers NRIs a regular monthly income while also providing potential for capital appreciation. These plans are offered by insurance companies, banks, financial institutions, and mutual funds. The best monthly income plans usually invest in a combination of fixed-income instruments such as bonds, debentures, and government securities, as well as equities. By diversifying the investment portfolio, these plans aim to balance income generation and capital appreciation, making them a suitable choice for NRIs seeking stable returns and growth potential. In the USA, Monthly Income Plans come in various forms, each with its unique features and benefits.
Best Investment Plan for Monthly Income in 2024
Here is a list of best investment plan for monthly Income in India in 2024:
| Monthly Income Plan | Minimum Period of Investment | Rate of Returns | Investment Amount | Risk | Tax Benefits |
| ULIP Plans | 5 years | 9 – 15 % p.a. | Rs. 1,000 – No Limit | Medium to High Risk | Available u/ Section 80 C and Section 10 (10D) of the IT Act, 1961 |
| Annuity Plans | Varies | 7 – 10 % | Generally, Rs. 10,000 – No Limit | Low to Medium Risk | Available u/ Section 80 C and Section 10 (10D) of the IT Act, 1961 |
| Pradhan Mantri Vaya Vandana Yojana (PMVVY) | 10 years | 7.4% p.a. | Rs. 1,56,658 – Rs. 15 lakhs | Low - Risk | Nil |
| Systematic Withdrawal Plans (SWPs) | 5 – 40 years | 7% -13% | Generally, Rs. 500 – No Limit | Medium-High Risk | Depends on the Plan |
| Long-Term Government Bonds | 10 years or more | 6% – 9% | Rs. 10,000 – No Limit | Low Risk | Available u/ Section 80 10(10D) and Sec 80CCF of the IT Act, 1961 |
| Mutual Fund Monthly Income Plans | ELSS Funds: 3 years | 8% - 15 % | Generally, Rs. 500 – No Limit | Medium Risk | Tax Benefits on ELSS investments u/ Sec 80C of the IT Act, 1961 |
| Equity Share Dividends | Varies | As per the market performance of underlying asset | Varies from Company to Company | High Risk | Tax benefits up to Rs. 1.5 lakhs on ELSS dividends |
Details of the Best Monthly Income Scheme
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ULIP Plans
Unit Linked Insurance Plans (ULIPs) are excellent investment options for NRIs seeking the dual benefits of life insurance and investment. These plans not only ensure life coverage but also provide opportunities to grow your wealth.
List of Best Investment Plans for Monthly Income in India in 2024:
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ICICI Prudential Lifetime Classic
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HDFC Life Click 2 Wealth
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SBI Life Smart Wealth Builder
Key Features of ULIP Plans as Monthly Income Scheme in India:
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Dual Benefit: ULIPs offer both life insurance and investment opportunities, making them a comprehensive financial solution.
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Monthly Income Option: NRIs can customize ULIPs to receive monthly income, providing regular payouts.
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Flexibility: ULIPs allow you to choose the premium amount, investment funds, and policy duration based on your financial goals.
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Investment Options: These plans offer various investment options, including equity, debt, and balanced funds, catering to different risk appetites.
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Tax Benefits: Premiums paid under ULIPs qualify for tax benefits under Section 80C, and the maturity amount is tax-free under Section 10(10D).
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Fund Switching: ULIPs allow switching between different investment funds to maximize returns based on market conditions.
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Transparency: Clear information about fund allocation, charges, and investment performance helps in making informed decisions.
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Lock-in Period: A mandatory lock-in period of 5 years encourages long-term investment.
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Partial Withdrawals: After the lock-in period, partial withdrawals provide liquidity for unexpected financial needs.
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Bonus and Loyalty Additions: Some ULIPs offer bonuses and loyalty additions, enhancing wealth accumulation for NRIs.
Check Out Here: Best SIP Plans for NRI
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Annuity Plans
Annuity plans are ideal for NRIs looking for guaranteed regular income. These plans provide a steady flow of funds, making them the best monthly income plan in India for retirement planning.
List of Best Investment Plans for Monthly Income in India in 2024:
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LIC Jeevan Akshay VII
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HDFC Life Pension Guaranteed Plan
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ICICI Prudential Immediate Annuity
Key Features of Annuity Plans as a Monthly Income Scheme India:
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Regular Monthly Income: Annuity plans guarantee monthly income, ensuring financial stability to NRIs.
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Pension Option: These plans serve as a pension option, providing income during retirement.
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Flexibility in Payout Options: Choose from lifetime, joint-life, or fixed-term annuity options.
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Customizable Payout Period: Select the desired payout period to match specific financial goals.
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Tax Benefits: Contributions to annuity plans are eligible for tax benefits under Section 80CCC.
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Death Benefit: Provides a death benefit to the nominee, ensuring family protection.
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Flexibility in Premium Payment: Options for single or regular premium payments to suit convenience for NRIs.
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Long-Term Financial Security: Ensures long-term financial security, maintaining your standard of living.
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Pradhan Mantri Vaya Vandana Yojana (PMVVY)
PMVVY is a government-sponsored pension plan designed for senior citizens, providing a regular income source to NRIs and thus considered the best investment plan for monthly income in India.
Key Features of the Pradhan Mantri Vaya Vandana Yojana as Monthly Income Scheme India(PMVVY):
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Targeted Audience: Designed for senior citizens.
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Assured Return: Offers 7.4% per annum.
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Investment Limit: Maximum investment of Rs. 15 lakhs.
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Tenure: Fixed tenure of 10 years.
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Monthly Income: Provides regular monthly income.
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Payout Frequency: Monthly, quarterly, half-yearly, or yearly payouts.
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Loan Facility: Loan available after 3 years.
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Premature Exit: Allowed in case of critical illness.
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Administration: Managed by LIC of India.
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Risk-Free Investment: Government-backed, ensuring safety.
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Systematic Withdrawal Plans (SWP)
SWPs are excellent for NRIs seeking regular income while keeping their investments intact. They are offered by ULIP plans, mutual funds, and other schemes.
Key Features of Systematic Withdrawal Plans (SWP):
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Regular Income: These monthly income plans in India provide a steady income stream through withdrawals.
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Flexible Withdrawal Amount: Customize withdrawal amounts as needed.
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Customizable Frequency: Choose withdrawal frequency – monthly, quarterly, semi-annually, or annually.
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Capital Appreciation: Combines principal and capital appreciation for growth.
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Investment Options: Available across various instruments like ULIPs, mutual funds, etc.
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Tax Efficiency: Offers tax benefits depending on the holding period.
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Professional Management: Managed by experienced fund managers.
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Withdrawal Flexibility: Adjust or stop withdrawals as per financial requirements.
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Growth Potential: Potential for market appreciation.
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Risk Management: Designed to manage investment risk effectively.
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Long-Term Government Bonds
Long-Term Government Bonds are safe investments with a 10-year maturity period, suitable for NRIs seeking stable returns.
Key Features of Long-Term Government Bonds:
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Maturity Period: Usually exceeds ten years, providing long-term investment, making them the best investment plan for monthly income in India.
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Fixed Interest Payments: Regular interest payments at a fixed rate.
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Coupon Rate: Fixed at issuance, remains constant.
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Principal Repayment: Repayment of the principal at maturity.
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Government Backing: Assured repayment by the government.
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Risk and Return: Generally safer with higher returns compared to short-term bonds.
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Market Trading: Actively traded, allowing pre-maturity sale.
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Fixed Income Investment: Preferred for stable, long-term income.
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Mutual Fund Monthly Income Plans
Mutual Fund Monthly Income Plans in India aim to provide regular income along with capital appreciation by investing in a mix of debt and equity.
Key Features of Mutual Fund Monthly Income Schemes in India:
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Regular Income: Provides steady monthly income through dividends.
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Asset Allocation: Invests in a mix of debt and equity instruments.
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Risk-Return Profile: Moderate risk, balancing stability and growth.
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Dividend Payouts: Regular dividends ensure consistent income.
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Systematic Withdrawal Plan (SWP): Option for systematic withdrawals.
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Professional Management: Managed by experienced fund managers.
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Flexibility and Liquidity: Easy entry and exit based on financial goals.
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Expense Ratio: Operational costs covered by an expense ratio.
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Equity Share Dividends
Equity Share Dividends provide monthly income through profit distribution by companies to shareholders, ideal for NRIs looking for both income and capital growth.
Key Features of Equity Share Dividends:
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Monthly Income: Provides regular income through profit distribution.
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Ownership in Companies: Shareholders become company owners.
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Cash Dividends: Dividends paid in cash.
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Regular Payouts: Monthly, quarterly, or annual payouts.
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Dividend Yield: Indicates income potential as a percentage of stock price.
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Potential for Capital Appreciation: Opportunity for share value growth.
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Taxation Considerations: Dividend income is taxable.
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Diversification Benefits: Reduces risk through diversified investments.
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Long-term Investment Perspective: Benefits from both income and capital growth over time.
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Check out: Investment Plan for NRI
Important Points to Consider Before Buying the Best Monthly Income Plan in India
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Investment Objective
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Define your investment goals: regular income stream or long-term growth.
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For NRIs seeking regular income, monthly income schemes are ideal.
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Look for the best monthly income plans in India that align with your objectives.
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Risk Appetite
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Determine how much risk you are comfortable taking.
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The best monthly income plans in India offer a stable income stream with some growth potential, suitable for conservative investors.
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Remember, all investments, including the best investment plan for monthly income in India, carry some risk.
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Returns
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Determine the kind of returns you are expecting.
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NRIs should compare different plans to find the best investment plan for monthly income in India.
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Investment Horizon
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Consider your investment duration.
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Monthly Income Plans are typically designed for long-term investors.
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Ensure the chosen plan aligns with your long-term financial goals.
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Tax Implications
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Understand the tax implications of investing in a MIP.
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Monthly Income Plans offer certain tax benefits; however, NRIs should be aware of specific tax rules applicable to them.
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Consult with a tax advisor to fully understand the benefits and obligations.
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Fees and Charges
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Compare the fees and charges associated with different best monthly income schemes
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Fees can impact the overall returns from the investment.
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NRIs should seek transparent and low-fee plans to maximize their returns.
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Liquidity
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Evaluate the liquidity of the best investment plan for monthly income in India.
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Monthly Income Plans are generally more liquid than equity investments but less liquid than bank deposits.
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Ensure the plan provides the necessary liquidity to meet your financial needs.
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Benefits of Monthly Income Plans
The benefits of a Monthly Income scheme India are listed below:
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Regular Income: Monthly income plans offer a consistent and reliable income stream, which is beneficial for NRIs who need to cover living expenses or other financial obligations. By investing in the best monthly income plan in India, you can ensure a steady cash flow, making it easier to manage your finances while living abroad.
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Potential for Growth: One of the significant advantages of MIPs is their potential for growth. These plans invest in a mix of debt and equity securities, offering a balance between safety and returns. While the best monthly income plans in India are generally less risky than pure equity investments, they provide better returns than traditional fixed-income options. This makes them an attractive option for NRIs looking for the best investment plan for monthly income in India.
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Tax Benefits: Investing in the best investment plan for monthly income in India also comes with tax advantages. NRIs can claim deductions under Section 80C and Section 10 (10D) of the Income Tax Act, 1961. These tax benefits can enhance the overall returns on your investment, making MIPs a tax-efficient option for generating monthly income.
Read Here: How to Get 50k pension per month?
In Conclusion
Monthly Income Plans serve as an attractive investment option for NRIs by offering a consistent monthly income along with the potential for capital appreciation. For NRIs looking to maintain regular remittances, achieve tax efficiency, and ensure professional management of their investments, Monthly Income Scheme India provides a comprehensive and reliable solution.
Past 10 Year annualised returns as on 01-12-2024
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
^Tax benefit are for Investments made up to Rs.2.5 L/ yr and are subject to change as per tax laws.
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
Tax benefit is subject to changes in tax laws. Standard T&C Apply
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).
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