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Retirement and beyond: Where to invest money to get monthly income?

written by Bella Palmer

Where to invest money to get monthly income - Plan your retirement with a monthly income scheme

To begin with, you should be clear what exactly a monthly scheme is and how it works. A monthly income plan is not a financial entity in itself, but a part of mutual fund. A monthly income scheme is an investment for those who want to invest money to get monthly income on a regular basis.

Under such monthly income plan, investment is made chiefly in debt securities and reserves which ranges from ten to twenty per cent of total assets for investment in equity instruments. The ROI on such investment market-driven and depends on the performance of the market. Although, mutual fund provides monthly dividend to shareholders, it is not legally obliged to do so. Investing in mutual funds always involves has risk factors associated with it, as it is tied to the market for returning dividends. It is in opposition to fixed deposits which are not directly dependent on market conditions. The monthly income schemes are much more liquid than other types of mutual funds.

Where to invest money to get monthly income?

The monthly income schemes involve much less risk since they are primarily dependent on debt securities such as corporate bonds, debentures and public securities. If you are looking to invest money to get monthly income, the monthly income plan is an option for those looking to invest in more attractive options such as fixed deposits but not as risky alternatives as stocks. Investing money to get monthly income is the ideal option for a relatively secure regular income. Apart from these, there are plans which may not be necessarily monthly but offer investors the option to withdraw their returns on a quarterly or half yearly basis. They allow investors to withdraw their money according to their requirements or reinvest by adding up the gains to the original or existing investment. The dividend under these investments is tax free which adds up to the total sum for the investor. This is because a mutual fund company pays a dividend distribution tax of fourteen per cent on the returns before transferring the sum of money to the shareholders or the investors.

The monthly income schemes are ideal for those nearing retirement since there is a steady monthly income from the investments. The regular monthly income plans are also for those who are looking for an income than possible by investing in fixed deposit. Although, there may be risks involved, the level of risk is lesser than investing in other plans which make it a better and safe option. 


The opinions expressed by our writers are their own and do not represent the views of UK Investment Guides. The information provided on UK Investment Guides is intended for informational purposes only. UK Investment Guides is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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