Selecting the best monthly income scheme is crucial for investors seeking consistent returns and financial stability, especially in the Indian context. Whether you are a senior citizen planning your retirement corpus or a working professional aiming for regular passive income, the right monthly income product can provide peace of mind. One of the most sought-after options includes fixed deposit schemes with a monthly payout feature. In fact, many investors wonder if they can generate about 25 lakh FD interest per month through reliable financial products. In this article, we will explore popular monthly income schemes, take an analytical look at FD interest rates, and highlight how products like Bajaj Finance FD can align with your financial goals.
Understanding the concept of monthly income schemes
Best Monthly income scheme are designed specifically to provide investors with periodic interest payouts. Unlike capital gains or lump sum maturity amounts, these schemes focus on steady cash flow, often paid monthly, quarterly or annually, depending on option chosen.
Monthly income schemes suit those who:
– Are retired or near retirement and need a reliable income source.
– Want to diversify their portfolio with low-risk investments.
– Prefer income over capital appreciation.
These schemes come in various forms including mutual funds, post office monthly income schemes, senior citizen savings schemes, and bank fixed deposits with monthly interest options.
Evaluating fixed deposits as monthly income schemes
Fixed deposits (FDs) are one of India’s most trusted investment options owing to guaranteed returns and safety. FDs with monthly interest payouts allow you to receive the accrued interest directly into your bank account every month.
Calculating 25 lakh FD interest per month
If an investor wonders about generating 25 lakh FD interest per month, we can estimate the capital required using prevailing interest rates.
Using the formula:
Monthly Interest = (Principal Annual Interest Rate) / 12
Assuming a 7.07% monthly interest rate (annualized for 24-60 months for senior citizens):
– Desired monthly income = Rs. 25,00,000
– Annual Interest Rate = 7.07% or 0.0707 (assuming compounding is annualised)
Required principal = (Desired monthly income 12) / Annual interest rate
= (25,00,000 12) / 0.0707
= Rs. 4,24,08,000 approx
This means an investor would need to invest about Rs. 42.4 crore in an FD earning 7.07% p.a. to generate Rs. 25 lakh monthly interest. This clarifies that while FDs provide steady income, the capital requirement to reach such high monthly income targets is significant.
Other popular monthly income schemes in india
While FDs are reliable, other schemes might suit varying risk profiles and income needs better.
Post office monthly income scheme (POMIS)
Managed by India Post, POMIS is a government-backed fixed-income scheme offering monthly payouts. It has a 5-year tenure with current interest rates around 6.6% p.a. though it varies.
– Minimum investment: Rs. 1,500
– Max investment: Rs. 4.5 lakh (individual), Rs. 9 lakh (joint)
– Guaranteed monthly income with quarterly interest addition.
However, POMIS maximum limits and lower returns may restrict its use for higher income needs like Rs. 25 lakh FD interest per month.
Monthly income plans (MIPs) mutual funds
MIPs are debt-oriented hybrid funds focusing on stability but with the possibility of decent returns through equity exposure.
– Returns fluctuate based on market conditions.
– Monthly dividends depend on fund’s profit distribution.
– Suitable for moderate-risk investors.
MIPs are more liquid than FDs but do not guarantee fixed monthly income.
Senior citizen savings scheme (SCSS)
SCSS offers 7.4% p.a. interest with quarterly payouts specifically targeting retirees.
– Tenure: 5 years, extendable by 3 years.
– Investment limits: Rs. 15 lakh per individual.
– Tax benefits under section 80C.
This is ideal for senior citizens looking for safety but may not generate extremely high monthly income alone without significant capital.
Why choose Bajaj Finance FD for monthly income needs
Bajaj Finance FD stands out due to multiple reasons:
Attractive interest rates and flexible tenure
– Higher interest rates than many banks, especially for seniors.
– Tenure ranges from as short as 12 months to long term of 60 months.
– Monthly interest payout options allowing predictable cash flow.
Safety and credibility
– Bajaj Finance has a strong market reputation.
– With stable credit ratings, assurance of timely interest payouts and principal repayment.
Ease of investment and digital facilities
– Online application and management.
– Auto credit of interest directly to linked bank accounts.
– Nomination facility to secure investments.
Suits a variety of investors
Whether you are targeting daily expenses post-retirement or need a risk-free income tranche in your portfolio, Bajaj Finance FD’s features accommodate these requirements effectively.
Conclusion
Choosing the best monthly income scheme necessitates a clear understanding of your income needs, risk appetite, and liquidity preferences. Among various options, Bajaj Finance FD emerges as a top contender with its attractive interest rates, monthly payout options, and strong market credibility.
