How to Invest 50 Lakhs for Monthly Income
How to Invest 50 Lakhs for Monthly Income in 2023
If there is one thing that the COVID-19 pandemic taught the world, it is how to manage finances effectively and make smart investments. If you have amassed a sum of ₹50 lakh and are looking for investment opportunities, think a little further.
A sum as sizeable as this can be invested for more meaningful returns as monthly income – whether for current use or for your golden years after retirement.
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Investment Options to Generate Monthly Income from ₹50 Lakh
Amongst a wide range of options, there are four distinct ways to invest your hard-earned ₹50 lakh to generate a good monthly income:
Mutual Funds
In a way similar to investing in SIPs (Systematic Investment Plans) that go into mutual funds, you can invest in Systematic Withdrawal Plans. These plans offer you:
- Flexibility to choose the investment amount and whether you would like to invest in debt or equity instruments.
- Freedom to choose the withdrawal frequency, which can range from monthly to annually.
SWPs invest a lumpsum into the market. When it is time to release your “income,” the units equivalent to your chosen amount are liquidated and credited to your bank account, and the remaining profit is rolled over to the principal for another term.
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Fixed Deposits
If you have a low-risk appetite, you can consider fixed deposits to generate monthly income from a lumpsum investment. These instruments do not offer high returns, but the risk is one of the lowest as compared to other investment options.
You can open an FD account and put ₹50 lakh in it and set it up to pay you the interest on this sum on a monthly, quarterly, or yearly basis. For example, Yes Bank offers an FD interest rate of 7.25% over a period of 5 years, while KVB Bank offers 6.50% for the same period.
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Corporate Deposits
Whenever there is a non-banking financial institution that needs to raise money through public investment, they provide an option of fixed deposits to investors in exchange for paying interest on the investment monthly, quarterly, or annually.
Depending on the company profile and the potentiality of defaulting on payments, this option can be a good investment choice for generating monthly income.
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FMPP
Fractional Matchmaking Peer to Peer plan is an investment option launched by LenDenClub that allows you to invest up to ₹50 lakh while remaining safe from market volatility.
The plan is aimed at helping you generate fixed monthly income by connecting directly with borrowers. The plan has generated a 12% return rate ever since its launch, making it a great investment option.
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Are You Ready to Make Your Money Earn for You?
Investing smart is the modern way to generate passive income that helps you improve your quality of life. If you have accumulated a lumpsum of ₹50 lakhs, consider putting your money to work through the investment options discussed above while you enjoy life.
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FAQs
1. Are monthly income plans risk-free?
No, they aren’t. All investments carry some level of risk. Before you take the plunge, you should consider meeting up with your financial advisor to understand your risk appetite. Based on your preferences, they can then tell you about the best investment instruments you can leverage to produce a sizeable monthly income from investing ₹50 lakh.
2. Is the rate of returns fixed for all the investment options?
No. It is important to know that the expected rate of return can change depending on the market performance of the fund. If you have planned for fixed monthly withdrawals, it may impact your principal amount if the returns aren’t as planned.
3. Why should I invest in LenDenClub’s FMPP?
The major benefit of this FMPP is that it is largely free of market volatility, giving you a stable ground for investment. The rate of returns is also significantly higher than FD options. Additionally, you can choose from a variety of investment plans to suit your needs.
Team LenDenClub
LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.
