How To Invest 25 Lakhs For Monthly Income

Are you looking to invest ₹25 lakhs for a steady stream of income? You’re in the right place.

Whether you’ve received an inheritance or diligently saved over the years, the question remains: how to invest 25 lakhs for monthly income? When invested smartly, ₹25 lakhs can easily give you enough income to manage monthly expenses without constant financial worry.

Various investment options are available today that offer monthly income. In this blog, we will take you through some of them.

Explore: How To Invest 1 Crore for Monthly Income

List of Investment Options

A glimpse into all the options we’ll discuss in this blog:

Investment Option	Risk	Return	Tax Saving
Government Bonds	Risk-free	Varies as per the type of bond	Tax benefits are available only on tax-free bonds
MIP	Moderate	Varies	No tax benefits
P2P Lending	Moderate	15%	No tax benefits
POMIS	Low	7.40%	No tax benefits
SCSS	Low	8.2%	Up to 1.5 lakh under Section 80C

Government Bonds

Government bonds are essentially the government borrowing money from the public to fund projects. They are highly secure investments that provide a decent rate of return.

Some of the common bonds include fixed-rate bonds, inflation-indexed bonds, treasury bills, state development loans, and cash management bills. You can buy them from the RBI Retail Direct Portal or through banks.

Pros:

Highly liquid
Guaranteed returns
Long maturity period
Risk-free

Cons:

Low returns

Check out: How to Invest 50 Lakhs for Monthly Income

Monthly Income Plans (MIPs)

MIPs, a type of mutual fund investment, are perfect for you if you prefer low to moderate risk. These plans invest primarily in debt funds and a small amount in equity options. There are two types of MIPs: dividend-oriented and growth-oriented.

In dividend-oriented funds, you get income in the form of dividends. In growth-oriented funds, your income is added to the invested amount.

Pros:

Open-ended
Low risk
There is no upper limit for investment
Professionally managed
More liquid than other mutual funds

Cons:

Lower returns than other mutual fund investments
Market fluctuations

Explore: How To Invest 15 Lakhs For Monthly Income

P2P Lending

P2P connects lenders and borrowers directly, cutting out banks as intermediaries.

The question is, how does it work?

Borrowers and lenders register on a P2P platform. Borrowers’ creditworthiness is assessed, considering various factors. Lenders choose whom to lend based on risk and return preferences.

P2P platforms charge fees, regulated by the RBI, but don’t hold onto lenders’ or borrowers’ money.

It’s a convenient way to bridge financing gaps.

You can diversify your portfolio by investing in Peer-to-Peer lending platforms, where you can lend money to individuals or small businesses, earning interest on your investment.

Pros:

Diversify your portfolio with potentially higher returns.
Accessibility to a growing alternative investment market.

Cons:

Limited regulations and platform-dependent risks

Know: Where and How to Invest One Lakh Rupees for 6 Months?

Post Office Monthly Income Scheme (POMIS)

POMIS is perfect for people looking for a fixed monthly income. It is also a low-risk option as it is government-backed. The current interest rate offered on the investments is 7.40%.

You can open an account with ₹1,000 and invest up to ₹9 lakhs in a single account and ₹15 lakhs in a joint account.

Pros:

Fixed income
Low risk
No TDS is applicable
Allows reinvestment
Fixed tenure of 5 years

Cons:

No withdrawals are allowed before one year from the date of deposit
Penalty on withdrawals before tenure completion

Know: Where and How to Invest 5 Lakhs

Senior Citizen Savings Scheme (SCSS)

If you are over 60 years old, SCSS is a great scheme to earn regular income. You can invest up to ₹30 lakhs, with the minimum investment being ₹1,000. The current interest rate is 8.2%.

While the lock-in period is 5 years, you can extend the investment for 3 more years by submitting an application. You can invest in SCSS through any authorized bank or post office.

Pros:

Tax benefits of up to Rs. 1.5 lakhs
Low-risk with guaranteed returns
Tenure can be extended by 3 years

Cons:

Age limit
No withdrawals allowed before one year
Penalty on withdrawals before tenure completion

Know: I Have 2 Lakhs Rupees Where to Invest

Factors to Consider

Some factors you should consider while investing ₹25 lakhs are:

Risk: Your risk appetite should match the investment options you are choosing. Most of the schemes mentioned here carry low risk.
Returns: Consider investments that provide guaranteed returns. Guaranteed returns are typically the least affected by market volatility.
Tax Benefits: Check whether the investment option offers tax benefits. Schemes like the SCSS offer tax savings under Section 80C.
Safety: Check whether the investment option is regulated or not. Schemes backed by the government (like POMIS and SCSS) are highly safe.

Conclusion

In this blog, we sought to answer the question: Where to invest 25 lakhs? The options discussed here are safe, low-risk, and ideal for monthly income. However, it is best to consider your own financial goals, risk tolerance, and time horizon before making any investment decisions.

How To Invest 25 Lakhs For Monthly Income