When it comes to investing for high returns, it’s important to understand that there’s always a certain level of risk involved. Different investment tools offer varying degrees of risk, and it’s up to individual investors to weigh the pros and cons of each option and choose the one that best fits their risk profile. For example, riskier investments may offer the potential for greater returns, but they may also carry a higher chance of loss.
For those with INR 50 lakh to invest who are looking to earn a fixed monthly income, there are a variety of investment options available. In this post, we’ll explore some of the top investment instruments that can help you earn a handsome monthly income while minimizing risk. By understanding the benefits and drawbacks of each option, you can make an informed decision and feel confident in your investment strategy.
Best Investment Options to Invest 50 Lakhs for Monthly Income
1. Savings Account
For those who are new to investing, savings accounts have long been considered the ideal choice for investment. This is especially true for individuals with a stable and consistent source of income, as they can use these accounts to begin building their investment portfolio.
In India, numerous private and public sector banks offer a variety of savings account options to cater to the diverse needs of their large customer base. Although each bank sets its own interest rates for savings accounts, these rates typically range from 2.50% to 7.00% per annum.
Before opening a savings account with a particular bank, it’s important to research and compares the various interest rates and facilities offered by different banks. This will help you make an informed decision and choose the savings account with the highest return on your investment.
2. Senior-Citizen Savings Scheme
For senior citizens who are looking to invest INR 50 lakh with a monthly return policy, the Senior Citizen Savings Scheme (SCSS) is an excellent option to consider. This scheme offers a competitive interest rate of 7.4% per annum with quarterly payments, making it an attractive investment opportunity.
The SCSS is widely available across Indian banks and post offices, making it a convenient option for investors. Additionally, the scheme allows for a maximum investment of INR 15 lakh, providing flexibility for those looking to invest a smaller or larger amount.
Overall, the SCSS is a reliable and secure investment option for senior citizens seeking to earn returns on their investments.
3. Government Bonds
If you’re looking for a secure investment option that guarantees a monthly income, then government bonds, also known as treasury bonds, may be an excellent choice for you. These bonds are ideal for individuals who prioritize low-risk investment avenues and want a reliable source of income.
Government bonds pay a fixed interest rate throughout the investment term, and when they mature, investors can receive a significant monthly income in the form of interest. This income can be especially beneficial if the initial investment amount is high.
In addition to the fixed interest rate, these bonds can also generate income through coupons issued by the Government of India. By investing in government bonds, you’re not only securing your financial future but also helping the government raise capital to fund various initiatives.
Overall, government bonds are an attractive investment option for those seeking a secure monthly income stream, making it an ideal choice for risk-averse investors.
4. Corporate Deposits
Corporate deposits are available through Housing Finance Companies (HFCs) or Non-Banking Financial Companies (NBFCs) in the private sector.
But before you rush to invest, it’s essential to note that these options are not for the faint of heart. Corporate deposits are considered high-risk investments, which means they come with high-risk returns. So, it’s crucial to tread carefully and thoroughly research the ratings of the financial company you plan to invest in.
If you’re willing to take on the risk and have 50 lakhs to invest in the private sector, corporate deposits could be a great option for generating high returns. With the right research and a smart investment strategy, you could be on your way to reaping the rewards of a high-risk, high-return investment plan.
5. Fixed Deposits
For years, fixed deposits have remained a reliable investment option for those looking to grow their wealth. One of the most attractive features of fixed deposits is the flexibility they offer in terms of tenure, which varies depending on the bank. And when the tenure comes to an end, you’ll receive not only your initial investment but also the interest that has been added to it. With their low-risk profile and guaranteed returns, it’s easy to see why fixed deposits continue to be a popular choice among investors looking for stability and security.
Investing Rs. 50 lakh is a significant decision, and it’s crucial to choose an investment plan that aligns with your requirements and expectations. Opting for a plan that fails to meet your expectations can result in premature withdrawal, leading to suboptimal returns in the future. It’s essential to pick investment schemes with a long-term outlook and consider your future goals and expenses before making any decisions. By doing so, you can ensure that your investment choices align with your financial objectives, providing stability and security for your future returns.
Naina Rajgopalan has a thing for numbers and a deep fascination to learn about all things finance. She’s been money-wise from a young age and has always shared her knowledge and tips with those around her. Being a part of the content team at Freo Save, a digital savings account that offers up to 7% interest rate on savings along with benefits such as insurance on balance, safe & secure banking, and so on. Naina stays updated with the latest of what happens in the banking and fintech industries. She has taken upon herself to share her knowledge with readers across all walks of life to help them manage their finances and budgets better, so they can make better decisions while spending, borrowing, investing and saving.