Guide To Understanding The Best Investment Plan For Monthly Income in India

Grip Invest
Grip Invest
Published on
Dec 19, 2022
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    Investors are often confused about how they should balance their investments. Which will be better, a short-term monthly return or a long-term one with end maturity that prepares them for retirement years? 

    Short-term monthly return investments are a supportive income source. Most monthly income schemes accrue returns after a few years of paying premiums or at the term end. You earn and invest.  

    If you are investing in monthly income schemes, a few factors should be checked. 

    • Financial goals
    • Appetite for high-risk, medium-risk, or low-risk
    • Investment horizon: the length of time you want to hold the investment portfolio

    How To Plan The Best Investment For A Monthly Income

    The popular choice is investing in traditional monthly income sources like fixed and recurring deposits. Individuals between the age bracket of 25-30 years and upwards who are prepared to invest INR 10,000 to create monthly income options can benefit from these mixed alternative investment ideas. 

    Monthly Income Plan (MIP) Mutual Funds

    This most popular investment has helped investors create significant wealth if they can sustain the risks in the long run. The short and medium returns are comparable to traditional investments like fixed deposits and recurring deposits. MIP is a debt and equity security investment that ensures cash flow while keeping capital intact. ‘Income Distribution cum Capital Withdrawal Plan’ IDCW has the option of income at regular intervals rather than reinvesting the profit. So, theoretically, you can earn regularly from this scheme. However, the reliability factor of this scheme is relatively low as fund managers declare distribution only when distributed surplus is accumulated in the scheme. That can be either quarterly, half-yearly or annually. So, if the fund fails to accumulate a surplus, it will not declare any distribution. This scheme does not guarantee payments and regular income.

    Monthly Income Using SWP

    Systematic Withdrawal Plans (SWP) have emerged as better regular income schemes through mutual funds. You can remove a part of the money periodically from mutual funds. By fixing a particular date and amount to be withdrawn, the amount will be entered into your account monthly, quarterly, or half-yearly, depending on your preference. You can also withdraw gains without touching the invested capital. In SWP plans, the unit balance reduces over time. The investment value rises if the appreciation in Net Asset Value (NAV) is higher than the withdrawal rate. But the effects of falling NAV can be just the opposite. The only assurance is that regardless of the NAV of the mutual fund scheme, as an investor, you can enjoy regular returns till the chosen term's end.  

    Corporate Bonds

    These are low-risk inflation-beating, short-term wealth-building assets and debt securities. Companies and the government issue these bonds to build their corpus. In return, investors earn interest payments on the invested sum. This bond is for a short period, and bonds rated A+ are the ones that should be chosen for investment. Those lower can entail risk. Corporate bonds are market-sensitive, but their volatility is relatively low compared to mutual funds. However, these bonds require significant investments, so they are not ideal for an individual investor. You can still buy these bonds directly when the company floats them from brokers, banks, or investment platforms.

    Asset Leasing

    Lease investing is a contractual investment policy, a thriving monthly income scheme and one of the best investment plans for monthly income in India. It works on an agreement between a company and the investor, simplified as lessee (user) & lessor (owner). Companies pay regularly to use the assets they need for their business, such as vehicles, machinery, etc., to investors for a specific period. This investment is mutually beneficial for companies and investors. Companies can grow without holding funds in assets, and investors earn from assets. This investment earns monthly fixed income and sources passive income. If you choose this investment from a reliable platform that backs every lease with robust collaterals, your investment and returns are at a lower risk.

    Inventory Financing 

    Companies need inventories to function. These are raw materials that help companies to produce their finished goods. This asset-backed financing facility allows investors to earn by investing in these assets or raw materials the company needs. The risk level in this investment is low. This kind of investment is mostly invited by startups. Therefore, before investing, you should ensure that the company you are backing with your investment can make the expected returns. However, this part is difficult to assess for a general investor, so it can be risky unless you participate from a legitimate financing platform.

    Invest In Alternative Monthly Income Plans Through Grip Invest

    Short-term, low-risk, and low-investment monthly income is a dream for every investor. Realising this need, Grip Invest has created exciting investment opportunities that help ordinary investors think of big income through unconventional means. The income opportunities that present financial opportunities in Grip are not new. However, the platform has tailored the opportunities to generate a win-win income option for all. These financial schemes are a low investment; therefore, many can participate. Companies looking for investors can work with huge funds generated by multiple investors. The returns are high as companies grow. So, while you keep investing in traditional and volatile investments with monthly returns, check out these attractive alternative income sources on Grip Invest.

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    Happy Investing!

    Disclaimer - Investments in debt securities are subject to risks. Read all the offer-related documents carefully. The investor is requested to take into consideration all the risk factors before the commencement of trading. This communication is prepared by Grip Broking Private Limited (bearing SEBI Registration No. INZ000312836 and NSE ID 90319) and/or its affiliate/ group company(ies) (together referred to as “Grip Invest”) and the contents of this disclaimer are applicable to this document and any and all written or oral communication(s) made by Grip Invest or its directors, employees, associates, representatives and agents. This communication does not constitute advice relating to investing or otherwise dealing in securities and is not an offer or solicitation for the purchase or sale of any securities. Grip Invest does not guarantee or assure any return on investments and accepts no liability for the consequences of any actions taken based on the information provided. For more details, please visit 
    Registered Address - 106, II F, New Asiatic Building, H Block, Connaught Place, New Delhi 110001.   

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