When it comes to building a steady income stream, monthly return investments are highly preferred in India—especially by retirees, freelancers, or anyone seeking passive income. Unlike lump sum investments that mature after years, these monthly income plans provide regular payouts, helping meet recurring expenses like rent, groceries, EMIs, etc.
In this comprehensive guide, we’ll explore the best investment options in India that offer monthly returns, their features, risks, returns, and who should invest in them.
✅ Why Choose Investments with Monthly Returns?
Before diving into specific schemes, let’s understand the benefits of choosing monthly income options:
| Benefits | Description |
|---|---|
| Stable cash flow | Supports daily or monthly expenses without liquidating your capital |
| Ideal for retirees | Offers pension-like income after retirement |
| Diversified choices | Ranges from low-risk government schemes to high-yield mutual funds |
| Reinvestment option | Many plans allow reinvestment for compounding benefits |
| Passive income | Enables you to earn without actively working |
🔍 Top Investment Options with Monthly Returns in India (2025)
Let’s explore the top-performing investment avenues in India offering monthly income, categorized by risk appetite.
1. Post Office Monthly Income Scheme (POMIS)
🏦 Government-backed and Safe
POMIS is a low-risk investment offered by India Post. It’s ideal for conservative investors looking for guaranteed monthly returns.
| Features | Details |
|---|---|
| Tenure | 5 years |
| Minimum investment | ₹1,500 |
| Maximum (single/joint) | ₹9 lakh / ₹15 lakh |
| Interest rate (2025) | ~7.4% p.a. (subject to quarterly revision) |
| Payout | Monthly |
| Risk level | Low |
Pros:
- Capital protection
- Regular income
- Tax benefits under Section 80C (if clubbed with SCSS)
Cons:
- Returns are not inflation-beating
- No compounding
Best For: Retirees, senior citizens, and low-risk investors.
2. Senior Citizens Saving Scheme (SCSS)
👴 Tailored for Retirees
SCSS is another secure and high-interest scheme from the Government of India for senior citizens above 60 years.
| Features | Details |
|---|---|
| Eligibility | Age 60+ (or 55+ for retirees) |
| Tenure | 5 years (extendable by 3 years) |
| Interest rate (2025) | ~8.2% p.a. (paid quarterly) |
| Maximum investment | ₹30 lakh |
| Payout frequency | Quarterly (but manageable monthly) |
| Taxation | Interest taxable |
Pros:
- High safety and better returns than FDs
- Government guaranteed
- Flexible maturity extension
Cons:
- Quarterly payout (needs planning for monthly use)
Best For: Retirees seeking safe, high-yield fixed income.
3. Monthly Income Plans (MIPs) – Mutual Funds
📈 Market-linked, Moderate Risk
Monthly Income Plans are debt-oriented hybrid mutual funds that invest 70–80% in debt and the rest in equity. They aim to generate regular income, though payouts are not guaranteed.
| Features | Details |
|---|---|
| Fund type | Hybrid (Debt-heavy) |
| Expected returns | 7%–10% annually |
| Payout option | Dividend or SWP (Systematic Withdrawal Plan) |
| Taxation | LTCG after 3 years |
| Risk level | Moderate |
Pros:
- Higher return potential than fixed-income options
- Professional fund management
- Tax-efficient if held >3 years
Cons:
- No guaranteed returns
- NAV fluctuation due to market exposure
Best For: Investors seeking monthly income with moderate risk appetite.
4. Systematic Withdrawal Plan (SWP) in Mutual Funds
🔄 Custom Monthly Income from Your Corpus
Unlike dividend plans, SWP allows investors to withdraw a fixed amount monthly from their mutual fund holdings, regardless of fund performance.
| Features | Details |
|---|---|
| Flexibility | Choose amount, date, frequency |
| Underlying funds | Equity, debt, or hybrid |
| Returns | Depends on fund performance |
| Taxation | LTCG/STCG applicable |
| Risk | Low to high (based on fund type) |
Pros:
- Predictable cash flow
- Tax-efficient vs. dividend option
- Retains growth potential
Cons:
- Market volatility can erode capital if not managed well
Best For: Investors with large corpus seeking customizable monthly payouts.
5. Bank Monthly Income Fixed Deposits
🏦 Traditional and Trusted
Many Indian banks offer Monthly Income FD Plans, where interest is paid monthly. It’s a no-risk option suitable for those not comfortable with mutual funds.
| Features | Details |
|---|---|
| Tenure | 1 to 10 years |
| Interest rate | 6%–7.5% (varies by bank) |
| Payout | Monthly interest |
| Risk | Very low |
| Taxation | Interest fully taxable |
Pros:
- Safe and predictable
- Easy to open online/offline
- Suitable for all age groups
Cons:
- Lower returns than market-linked options
- TDS applies if interest >₹40,000 p.a.
Best For: Conservative investors or those seeking a safe parking space for funds.
6. Corporate Bonds or NCDs (Monthly Payout)
🏢 Higher Returns with Moderate Risk
Some companies issue Non-Convertible Debentures (NCDs) or corporate bonds offering monthly interest payments.
| Features | Details |
|---|---|
| Returns | 8%–10% p.a. |
| Tenure | 3–10 years |
| Risk level | Moderate (depends on issuer’s credit rating) |
| Liquidity | Listed on exchanges |
| Taxation | Interest taxable |
Pros:
- Better yield than bank FDs
- Fixed monthly payout
Cons:
- Credit risk
- Illiquidity in some cases
Best For: Individuals looking for higher returns with a medium risk profile.
📊 Comparative Table of Monthly Income Investments
| Investment Option | Returns | Risk Level | Monthly Payout | Suitable For |
|---|---|---|---|---|
| Post Office MIS | ~7.4% | Low | Yes | Retirees, low-risk seekers |
| SCSS | ~8.2% | Low | Indirectly | Senior Citizens |
| Mutual Fund MIPs | 7%–10% | Moderate | Yes | Middle-aged investors |
| SWP in Mutual Funds | Varies | Varies | Customizable | High corpus holders |
| Monthly Income FDs | 6%–7.5% | Very Low | Yes | All investors |
| Corporate Bonds/NCDs | 8%–10% | Moderate | Yes | Income-seeking investors |
🧠 Key Factors to Consider Before Investing
- Risk Appetite: Always align investments with your risk tolerance.
- Liquidity Needs: Choose flexible options like SWP if you may need funds anytime.
- Taxation Impact: Interest from FDs, SCSS is taxable; mutual funds have LTCG benefits.
- Investment Horizon: For short-term, go for FDs; for long-term, explore SWP/MIPs.
- Income Stability: Government schemes offer fixed income, while market-linked options may fluctuate.
📝 Expert Tips for Monthly Income Planning
- Diversify across safe and growth options.
- Reinvest unused income in liquid funds or REITs.
- Keep an emergency fund equal to 6–12 months of expenses.
- Use SWP over dividend option in mutual funds for better tax efficiency.
👥 Who Should Invest in Monthly Income Options?
| Investor Profile | Recommended Option |
|---|---|
| Retired Senior Citizens | SCSS, POMIS, Bank FDs |
| Salaried Individuals | MIPs, SWP in balanced funds |
| Freelancers | SWP, Corporate NCDs |
| Low-risk Investors | POMIS, Bank FDs |
| High-net-worth (HNIs) | Corporate bonds, SWP, REITs |
🏁 Conclusion
Whether you’re planning for retirement, saving for child’s education, or simply want consistent monthly income, India offers a wide range of investment options. From government-backed schemes like POMIS and SCSS to market-linked options like MIPs and SWPs, each avenue comes with its own benefits and trade-offs.
To make the most of your money:
Match your investment with your risk profile, liquidity needs, and income goals.
Start small, stay consistent, and let your money work for you every month.
🔎 FAQs
Q1. Which investment gives monthly returns in India?
👉 Options include Post Office MIS, Senior Citizens Saving Scheme, Monthly Income FDs, Mutual Fund MIPs, SWP, and Corporate Bonds.
Q2. Is SWP better than dividend payout?
👉 Yes, SWP is more tax-efficient and customizable, unlike dividends which may be irregular and taxable.
Q3. Can I earn ₹10,000 monthly through investment?
👉 Yes. To earn ₹10,000 per month, you may need to invest around ₹15–17 lakh in a mix of POMIS, SWP, or corporate bonds offering 7%–8% returns.