Which investment is best for monthly income?

As several factors like inflation keep playing spoilsport with our earnings, a second income becomes extremely important. It can help ensure that your budget stays on track and that there is enough income left for you to save on a monthly basis.

Most people look for a second part-time job for income. But this may not be feasible for everyone due to time and other constraints. But what if we tell you all you need is a considerable corpus to give you monthly regular income?

Investing is one way to earn a passive income. But what investment option should you choose? Let us take a look at a few possible investment options through this article.

Fixed deposits

Fixed deposits are one of the most popular investment options. They are a low-risk investment option that offers stable returns. This is because FDs are not market-linked. Instead, the profit is generated solely from the interest that the bank gives. But that also means it has less return potential when compared to market-linked options.

But FDs can be a wise option if you want to invest to receive a monthly income. Normally, FDs reinvest the interest back into the corpus. Hence, ensure you choose a monthly income scheme.

Post Office Monthly Income Scheme

Post offices connect the nation as no other government system does. It has roots even in the most rural villages of India. Because of this, post offices make a good aggregator of savings schemes. Hence, the government has introduced several investment schemes through post offices, and the post office monthly investment scheme is one among them. You can park your corpus in this scheme to earn a 7.3% annual return, paid every month. However, there is an upper limit of Rs.4.5 lakhs for individual accounts.

Long-term Government Bond

Long-term government bonds are another choice here. Bonds are also a safe investment option that comes with minimal risk However, the tenure of government bonds is considerably long and ranges from 8 to 10 years. They offer a higher rate of interest compared to other conservative option and they pay you interest income half-yearly. Also, at maturity, you will get the entire amount you invested back as well.

Even though the maturity period is longer, they can traded in the secondary market, making it a considerably liquid investment option. Hence, you may make bond investment for regular income generation.

Corporate deposits

Corparate deposits are FD like investment options offered by corporates and different non-banking financial corporations (NBFCs). Similar to FDs, they are a low risk investment option that accrues profit from a fixed interest rate.

They offer payouts on half-yearly or on an annual basis. Here, too, ensure you choose income plan to ensure your profit is not reinvested.

But you have to extremely cautious while investing in corporate deposits. You need to do your research and choose trusted NBFCs only.

Mutual funds

Lastly, mutual funds are a good option to get monthly income but if chosen the right plan. In nomal circumstances, mutual fund investment are mostly mean for long term and whatever profit you generate gets reinvested to the corpus. This is true in case of both debt and equity plans. But you could choose a Systematic Withdrawal Plan (SWP) here. The same allows you to deposit a corpus of money and then at every month on a given date, certain units get redeemed so that you will get a monthly income.


Investing is an ideal option for monthly income generation but choosing what works for you is important. Hence, consider the above options and compare its features with your horizon before investing.

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