Best Investment Plans for Regular Monthly Income | Passive Income Schemes | Get Monthly Fixed Income

Josh Talks Stock Market

24 Apr 202409:23

Summary

TLDRThis video script introduces various investment ideas for generating regular income alongside long-term wealth creation. It highlights Systematic Withdrawal Plans (SWP) from mutual funds offering 10-12% returns, the Post Office's Monthly Income Scheme with 6.6% annual returns, and long-term government bonds with monthly interest payments. Additionally, it covers annuity plans for retirement security, and the Senior Citizens Savings Scheme, which provides a higher interest rate of 8.2% with tax benefits and a maturity period of 5 years, extendable by another 3 years.

Takeaways

💼 Investing in the long term can create a substantial corpus and provide good returns, contrary to the common belief that only salaries or businesses can provide regular income.
📈 Systematic Withdrawal Plan (SWP) is an investment strategy that allows investors to earn regular income from their investments for a fixed period.
🏦 Mutual fund houses like Tata, SBI, ICICI, and Canara offer SWP services with average returns of 10-12%, making them a viable option for regular income.
🏣 Post Office's Monthly Income Scheme (MIS) is a government-backed investment option that provides a fixed 6.6% annual return paid monthly, suitable for risk-averse investors.
💳 Long Term Government Bonds are another low-risk investment option that offers regular income through monthly interest payments based on the government's coupon rate.
🔖 Annuity Plans, offered by insurance companies, provide a constant income at low risk, with options for deferred or immediate income streams post-lumpsum investment.
👵 Senior Citizens Savings Scheme is a Post Office scheme designed for individuals aged 60 or above, offering a higher interest rate and tax benefits under section 80C.
💰 The Senior Citizens Savings Scheme allows for a maximum investment of Rs 30 lakhs, with a maturity period of 5 years and an option to extend for another 3 years.
📊 After 5 years, a Rs 30 lakh investment in the Senior Citizens Savings Scheme at 8.2% interest rate can grow to Rs 42.3 lakhs, providing a quarterly interest of Rs 61,500.
🌐 The video encourages viewers to consider these investment ideas for long-term wealth creation and regular income, and to explore further if they are already investing in similar options.

Q & A

What is the main topic discussed in the video script?
-The main topic discussed in the video script is various investment ideas that can provide both long-term wealth creation and regular income.
What is SWP and how does it work?
-SWP stands for Systematic Withdrawal Plan. It is an investment plan where an investor's investment provides regular income for a fixed time. Mutual fund houses like Tata, SBI, ICICI, and Canara offer SWP services with average returns of 10-12%.
What are the benefits of investing in SWP funds from mutual fund houses?
-Investing in SWP funds from mutual fund houses can create a good income source with regular income from investments, along with the potential for returns of 10-12% on average.
What is the Post Office's Monthly Income Scheme (MIS) and what are its features?
-The Post Office's Monthly Income Scheme (MIS) is a government-backed scheme that provides regular income to investors. It offers fixed annual returns of 6.6%, paid monthly, with a maturity period of 5 years. The maximum individual investment limit is Rs 4.5 lakh, and up to Rs 9 lakh in a joint account.
Why are government bonds a good option for regular income with less risk?
-Government bonds are a good option for regular income with less risk because they are backed by the government, ensuring stability. They pay interest on a monthly basis and are available for various investment durations, allowing investors to choose based on their convenience.
What are Annuity Plans and how do they provide regular income?
-Annuity Plans are offered by insurance companies in India and provide constant income at very low risk. Investors make a lumpsum investment, and the plan continues to give regular income at regular intervals. There are two types: Deferred Annuity, where the investor chooses when to start receiving income, and Immediate Annuity, which starts providing income immediately after investment.
What is the Senior Citizens Savings Scheme and who is it designed for?
-The Senior Citizens Savings Scheme is a prominent scheme by the Post Office designed for individuals aged 60 years or more. It aims to provide regular monthly income post-retirement with a higher interest rate than other government schemes, currently at 8.2%, and a maturity period of 5 years, extendable by another 3 years.
What are the tax implications of investing in Annuity Plans?
-In Annuity Plans, there are no tax benefits, and the plans are taxable. This means that the income received from these plans is subject to income tax as per the investor's tax bracket.
What is the minimum and maximum investment limit for the Senior Citizens Savings Scheme?
-The minimum investment in the Senior Citizens Savings Scheme can be as low as Rs 1000. For a joint account, the maximum investment limit is Rs 30 lakh, while for an individual account, it is capped at Rs 15 lakh.
How does the Senior Citizens Savings Scheme benefit from Section 80C of the Income Tax Act?
-The Senior Citizens Savings Scheme benefits from Section 80C as it allows for tax-free investment up to Rs 1.5 lakh. This means that the investment amount of Rs 1.5 lakh can be deducted from the investor's total taxable income.
What is the potential growth of an investment of Rs 30 lakh in the Senior Citizens Savings Scheme over 5 years?
-If an individual invests Rs 30 lakh in the Senior Citizens Savings Scheme at an 8.2% interest rate for a maturity period of 5 years, their investment would grow to approximately Rs 42 lakh 30 thousand. They would also receive quarterly interest of Rs 61,500, which equates to Rs 20,500 per month.

Outlines

00:00

💼 Investment for Regular Income: SWP and Post Office's MIS

The first paragraph introduces the concept of generating regular income through investments, contrary to the common belief that only long-term investments or salaries provide steady earnings. The video discusses the Systematic Withdrawal Plan (SWP) as an investment strategy that offers regular income from mutual funds, with an average return of 10-12% from houses like Tata, SBI, ICICI, and Canara. It also introduces the Post Office's Monthly Income Scheme (MIS), a government-backed option with a lower risk and a fixed annual return of 6.6%, which is paid out monthly. The scheme has a maturity period of 5 years and allows individual investments up to Rs 4.5 lakh and joint investments up to Rs 9 lakh.

05:02

🏦 Diversified Investment Options for Long-Term Wealth and Regular Income

The second paragraph delves into various investment options that not only aim to build wealth in the long term but also provide a regular income stream. It starts with discussing annuity plans offered by insurance companies in India, which are popular for securing retirement and come in two types: Deferred Annuity and Immediate Annuity. These plans involve a lumpsum investment and provide regular income intervals, with certain fees and charges but no tax benefits. The paragraph also highlights the Senior Citizens Savings Scheme, a government initiative for individuals aged 60 and above, offering an attractive interest rate of 8.2% with a 5-year lock-in period. The scheme allows investments ranging from Rs 1000 to Rs 30 lakh for joint accounts and up to Rs 15 lakh for individual accounts, with the benefit of tax exemption under section 80C. The video concludes by encouraging viewers to consider these investment ideas for a steady income and long-term financial growth.

Mindmap

Keywords

💡Investment

Investment refers to the allocation of money with the expectation of generating income or profit. In the video's context, it's about using money to create wealth over time. The script discusses various investment ideas that not only aim for long-term growth but also provide regular income, such as Systematic Withdrawal Plans (SWP) and government bonds.

💡Regular Income

Regular income is a steady flow of earnings received over time, typically from a job or business. The video challenges the common belief that regular income can only come from a salary or business, by presenting investment options that offer periodic payouts, such as SWPs and annuity plans.

💡Systematic Withdrawal Plan (SWP)

A Systematic Withdrawal Plan (SWP) is an investment strategy that allows investors to receive a regular income from their investments over a fixed period. The script mentions SWP as a way to earn regular income from mutual funds, with an average return of 10-12% offered by companies like Tata, SBI, ICICI, and Canara.

💡Post Office's Monthly Income Scheme (MIS)

The Monthly Income Scheme (MIS) is a government-backed investment plan that provides a regular income to investors. The video highlights this scheme as a low-risk option for those seeking regular income, with a fixed annual return of 6.6% paid out monthly, and a maturity period of 5 years.

💡Long Term Government Bonds

Long term government bonds are debt securities issued by the government with a maturity period extending beyond ten years. The video suggests these bonds as a means to secure regular income with lower risk, as they pay interest on a monthly basis and are used for government fundraising.

💡Annuity Plans

Annuity plans are financial products offered by insurance companies that provide a constant income stream in exchange for a lump-sum investment. The video explains that these plans are popular for retirement security, with two types: Deferred Annuity and Immediate Annuity, offering regular payouts after a chosen period or immediately, respectively.

💡Senior Citizens Savings Scheme

The Senior Citizens Savings Scheme is a government initiative aimed at providing a stable income source for individuals aged 60 and above. The script describes this scheme as offering a higher interest rate compared to other government schemes, currently at 8.2%, with a 5-year lock-in period and the option to extend for another 3 years.

💡Tax Benefits

Tax benefits refer to the financial incentives provided by the government to encourage certain types of investments. The video mentions that the Senior Citizens Savings Scheme offers tax benefits under section 80C, allowing for tax-free investment up to Rs 1.5 lakh.

💡Lump-sum Investment

A lump-sum investment is a single, large payment made into an investment account, as opposed to regular, smaller contributions. The video uses this term in the context of annuity plans and the Senior Citizens Savings Scheme, where a one-time payment is made to start receiving regular income.

💡Maturity Period

The maturity period is the duration after which an investment is expected to return its principal amount along with any accrued interest or profit. In the video, the maturity period is discussed in relation to the Post Office's MIS and the Senior Citizens Savings Scheme, both of which have a 5-year maturity period.

💡Interest Rate

The interest rate is the percentage of an investment's principal that is paid out as profit over a specified period of time. The video discusses various investment options with different interest rates, such as the 6.6% for the Post Office's MIS and the 8.2% for the Senior Citizens Savings Scheme.

Highlights

Investing in the long term can create a large corpus and provide good returns, contrary to the belief that only salary or business can offer regular income.

Systematic Withdrawal Plan (SWP) is an investment strategy that provides regular income for a fixed time period.

Mutual fund houses like Tata, SBI, ICICI, and Canara offer SWP services with average returns of 10-12%.

Post Office's Monthly Income Scheme (MIS) is a government-backed investment option with reduced risk.

MIS offers a fixed annual return of 6.6% paid monthly, with a maximum individual investment limit of Rs 4.5 lakh.

Long Term Government Bonds are a low-risk investment option that provides regular income through monthly interest payments.

Annuity Plans offered by insurance companies provide a constant income at very low risk, suitable for retirement security.

There are two types of annuity plans: Deferred Annuity and Immediate Annuity, offering different income start times.

Annuity Plans may involve fees, commissions, and surrender charges, and are taxable without tax benefits.

Senior Citizens Savings Scheme (SCSS) is a prominent Post Office scheme for individuals aged 60 or above.

SCSS offers a higher interest rate than other government schemes, currently at 8.2%, with a 5-year lock-in period.

Investments in SCSS qualify for tax benefits under section 80C, allowing tax exemption on Rs 1.5 lakh.

The minimum investment in SCSS is Rs 1000, with a maximum of Rs 30 lakh for joint accounts and Rs 15 lakh for individual accounts.

An example calculation shows that investing Rs 30 lakh in SCSS can yield Rs 42 lakh 30 thousand after 5 years, with a monthly income of Rs 20,500.

The video discusses various investment ideas that provide both long-term returns and regular income sources.

Encouragement for viewers to continue investing in these ideas and to share their experiences in the comments.