Monthly Income Scheme – Features & Benefits
A typical designed for conservative risk-appetite pensioners & investors, now, the monthly income plan is an investment option that invest money mainly in low-risk securities. Basically, it acts as a steady pace of income for individuals who are looking to create an alternate source of (monthly income). Not to miss, the income generated through monthly income scheme is mostly in the form of dividend and interest. Although, this scheme does not offer a fixed revenue, just, like other market related investment options, the returns are governed by the profit(s) generated.
Monthly Income Plans – What are you?
The overall concept of monthly income scheme is debt oriented as 70-80% of its fund goes into debt funds whilst the remaining goes into stock options. This whole process is done with an aim to earn stable returns & capitalize on the investment as and when possible through equity-exposure.
Features & Benefits of Monthly Income Scheme
- This scheme is totally flexible & does not come with any upper-limit on its investment amount. An investor can invest in this scheme as per their requirement & capability.
- It is an open-ended monthly scheme because individuals don’t have to pay any processing charges.
- An MIP scheme is more liquid as compared with other schemes. Also, there is no lock-in-period, therefore, investors can withdraw their funds in case of any emergency.
- Providing better returns as compared to other traditional investment mode.
- Monthly Income Scheme comes with a low-risk component because money is invested in low-risk securities like fixed income instruments, dividend stocks, and preferred shares.
Monthly Income Scheme – Who Should Invest?
The perfect blend of reward & risk makes Monthly Income Scheme a feasible investment option for the retirees having a limited source of (steady) income. Instead of providing them with a source of earning monthly, this scheme would help the retirees plan against any unforeseen emergencies. Also, investors who are onto risk & tend to have a conservative outlook towards their investments can invest their money in this scheme. NOTE: Individuals belonging to the high-tax bracket can also consider Monthly Income Scheme for high tax-efficiency, whereas, those belonging to the low-tax bracket & are looking to improve their earnings can consider this as a growth option.
Monthly Income Scheme – Things to Consider
- Investment time-horizon they are comfortable
- The premium of monthly income scheme & its viability
- Investment time horizon they are comfortable
- Short & long-term financial goals they want to achieve
- Tax-benefits offered
- Their suitability & current lifestyle
- Wealth generation/scope of income
All the above mentioned features and things to consider are good enough, but make sure to consider market conditions before jumping on to any conclusion. Nowadays, there are various monthly income plans, thus, individuals must take a good care before jumping to any particular scheme. Better to know the requirements & needs as an investor.
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*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.