How and Where to Invest ₹10 Lakh Rupees for Monthly Income in India
A growing number of Indians are searching for ways where they can invest ₹10 lakhs for a monthly income.
With over 2 million retail investors joining new-age investment platforms in the last two years alone, the demand for reliable, data-backed investment strategies has never been higher.
According to the industry reports, traditional fixed deposits currently offer annual returns between 6% and 7.5%, while alternative options like P2P lending are delivering an average ROI of 10% to 12% per annum.
As inflation continues to erode purchasing power, more investors are exploring diverse lending-based avenues to ensure their money not only works harder but also provides consistent payouts. This shift is reshaping the landscape of personal finance in India.
Therefore, it is essential to understand which money lending options can actually deliver on the promise of monthly income from a ₹10 lakh investment.
Let’s dig deeper and understand how to invest 10 lakhs and earn monthly income.
What Can You Realistically Expect from a 10 Lakh Investment?
First, let’s get real about what is possible.
With ₹10 lakhs, you can generate anywhere from ₹5,000 to ₹10,000 monthly income depending on your risk appetite.
Here’s a quick breakdown of what different return rates would give you:
Interest Rates | Interest Income |
|---|---|
6% | ₹5,000 |
7% | ₹5,833 |
8% | ₹6,666 |
9% | ₹7,500 |
10% | ₹8,333 |
11% | ₹9,166 |
12% | ₹10,000 |
But wait – these figures don’t account for taxes and inflation! A 6% return barely keeps pace with inflation, which means your purchasing power stays flat.
To truly grow your money while enjoying monthly income, you’ll need a carefully balanced approach.
Check out our detailed guide if you are especially looking for ways to know where to invest 1 lakh rupees.
Or else keep ready further to know the best investment options for 10 lakhs in India.
Where to Invest 10 Lakhs for Monthly Income in India: Best Investment Options
Let’s dive into the specific ₹10 lakh rupees investment options that can start putting money in your pocket each month.
1. Fixed Deposits (FDs): Reliable But Limited Returns
Fixed deposits remain popular among Indian investors looking for guaranteed returns. This is the best investment option especially for middle class.
By May 2025, most major banks offer rates between 6.5% and 7.5% for general citizens.
Here’s what you could earn monthly from a 10 lakh FD:
| Popular Banks | Interest Income on FD you May Expect |
|---|---|
| State Bank of India | ₹5,666 |
| ICICI Bank | ₹5,916 |
| HDFC Bank | ₹5,500 |
| Yes Bank | ₹6,041 |
| IndusInd Bank | ₹6,250 |
Want higher returns? Small finance banks offer significantly better rates:
| Small Finance Banks | Interest Income on FD you May Expect |
|---|---|
| Unity Small Finance Bank | ₹7,500 |
| Ujjivan Small Finance Bank | ₹6,875 |
| Equitas Small Finance Bank | ₹7,083 |
| Fincare Small Finance Bank | ₹7,175 |
How to implement this strategy: Split your 10 lakhs across 2-3 FDs with different maturity dates. Opt for the monthly interest payout option rather than cumulative interest.
The catch: While FDs are safe, returns barely outpace inflation. Also, interest is fully taxable at your income tax slab rate, which can significantly reduce your actual returns.
2. Corporate Fixed Deposits: Higher Returns with Calculated Risk
Want to bump up your FD returns by 1-2%?
Corporate FDs from reputable companies might be your answer.
Companies like Bajaj Finance and Shriram Finance consistently offer higher rates than bank FDs.
| Finance Companies | Interest Rates and Income |
|---|---|
| Shriram Finance | ₹7,058 (8.47%) |
| Bajaj Finance Ltd | ₹6,875 (8.25%) |
| Mahindra Finance | ₹6,750 (8.10%) |
| LIC Housing Finance | ₹6,458 (7.75%) |
| Sundaram Finance | ₹6,458 (7.75%) |
Important safety tip: Only invest in companies with high credit ratings (AAA or AA+) from agencies like CRISIL or ICRA. Unlike bank FDs, corporate deposits aren’t covered under DICGC insurance.
3. Systematic Withdrawal Plans (SWPs) from Debt Mutual Funds
Debt funds offer better tax efficiency compared to FDs while providing comparable returns.
Here’s how you can create monthly income:
- Invest 10 lakhs in debt mutual funds
- Set up an SWP to withdraw a fixed amount monthly
- Current returns range from 7-9% depending on the fund category
Best debt fund categories for monthly income:
- Ultra short-term funds (7-7.5% returns)
- Low duration funds (7-8% returns)
- Short-term funds (7.5-8.5% returns)
Tax advantage: If you hold debt funds for over 3 years, gains are taxed at 20% with indexation benefits, which can significantly reduce your tax liability compared to FDs.
Why this works: A ₹10 lakh investment in a debt fund yielding 8% can provide around ₹6,666 monthly for 15+ years without depleting your principal significantly when managed properly.
4. Dividend-Paying Stocks: Growth + Income
Blue-chip stocks with strong dividend histories can provide both income and capital appreciation.
Companies like Coal India, Power Grid Corporation, and NTPC have historically offered dividend yields of 5-8%.
How to implement:
- Create a portfolio of 8-10 established dividend-paying companies
- Focus on companies with consistent dividend track records
- Reinvest some dividends to counter inflation
Pro tip: Look beyond the obvious. PSU banks and energy companies often offer higher dividend yields than private sector companies.
A ₹10 lakh investment across carefully selected dividend stocks might generate ₹5,000-₹6,500 monthly, with potential for capital appreciation over time.
Want to explore more investment options? Check out our detailed guide on best investment plans for monthly income.
Peer-to-Peer (P2P) Lending: An Emerging Alternative Way for Monthly Income
P2P lending has emerged as one of the most attractive options for generating monthly income.
Peer to Peer Lending Platforms in India like LenDenClub connect lenders like you with borrowers who need funds.
According to recent data, P2P lenders have earned average returns of 12-14% annually.
On a 10 lakh investment, this translates to approximately ₹8,333-₹11,666 monthly income.
How P2P lending works for Investors with 10 Lakhs:
- You register on a platform like LenDenClub
- Spread your 10 lakhs across multiple borrowers (diversification is key)
- Receive monthly repayments (principal + interest) directly in your bank account
Key advantages of P2P lending:
- Higher ROI than traditional fixed income options
- Monthly cashflow from day one
- RBI-regulated investment avenue since 2018
- Ability to choose your risk level and expected returns
The smart strategy: Use the 80:20 approach – lend 80% to high-rated borrowers with reasonable returns and 20% to lower-rated borrowers for potentially higher returns. This balance helps maintain good returns while managing risk.
Tax implications: The interest earned through P2P lending is taxed under “Income from Other Sources” at your applicable income tax slab rate.
10 Lakh Rupees Monthly Income Portfolio: Balancing Risk and Returns
Now, let’s put everything together.
Here are three sample portfolio examples for investors with ₹10 lakh rupees based on risk appetite:
Conservative Portfolio (Expected monthly income: ₹6,250-₹7,500)
- ₹4 lakhs in bank FDs (7%)
- ₹4 lakhs in corporate FDs (8%)
- ₹2 lakhs in ultra short-term debt funds (7%)
Moderate Portfolio (Expected monthly income: ₹7,500-₹9,000)
- ₹3 lakhs in corporate FDs (8%)
- ₹3 lakhs in debt mutual funds (8%)
- ₹3 lakhs in P2P lending (12%)
- ₹1 lakh in dividend stocks (6-8%)
Growth-Oriented Portfolio (Expected monthly income: ₹8,500-₹10,000)
- ₹2 lakhs in corporate FDs (8%)
- ₹2 lakhs in debt mutual funds (8%)
- ₹5 lakhs in P2P lending (12-14%)
- ₹1 lakh in dividend stocks (6-8%)
How to Invest 10 Lakhs for Monthly Income: Step-by-Step Guide
Ready to start generating monthly income by investing your 10 lacs rupees? Here’s your action plan:Step 1: Assess Your Financial Situation
Before investing 10 lakhs, make sure you:- Have an emergency fund covering 6 months of expenses
- Have adequate life and health insurance
- Have cleared high-interest debts
Step 3: Open Investment Accounts
For P2P lending, you’ll need to:- Complete KYC verification
- Link your bank account
- Start with smaller amounts to understand the platform
- Choose between direct (higher returns) and regular plans
- Set up SWPs for monthly payouts
- Compare rates across banks and NBFCs
- Opt for monthly interest payouts
- Ladder your FDs with different maturity dates
Step 4: Create a Diversified Portfolio
Don’t put all 10 lakhs in one investment type. The sample portfolios above show how you can spread your risk while maintaining good returns.Step 5: Monitor and Rebalance
- Review your investments quarterly
- Track the performance of P2P loans
- Reinvest matured FDs at best available rates
- Adjust your portfolio if any investment underperforms
Common Mistakes to Avoid When Investing Ten Lakhs for Monthly Income
- Chasing the highest returns without considering risk – Higher returns always come with higher risk
- Ignoring tax implications – Different investments have different tax treatments
- Not accounting for inflation – A 7% return means just 1-2% real return after inflation
- Putting all money in one investment type – Diversification is crucial for managing risk
- Not having a withdrawal strategy – Taking out too much too soon can deplete your principal
FAQs About 10 Lakhs Investment Plans
Is it possible to earn ₹50,000 monthly from a 10 lakh investment?
No, that would require a 60% annual return, which isn’t sustainably possible without extremely high risk. Be wary of any scheme promising such returns.
Should I invest all 10 lakhs at once or in smaller amounts?
For FDs, you can invest the full amount. For market-linked options like mutual funds, consider staggered investments over 3-6 months to average out market volatility.
Conclusion
Turning 10 lakhs into a sustainable monthly income requires balancing safety, returns, and growth.
The investment landscape constantly changes, so staying informed about interest rates and new opportunities is essential.
Remember, it doesn’t end with investing your 10 lakhs. Regular monitoring, rebalancing when needed, and reinvesting some returns will ensure your monthly income keeps growing over time, beating inflation and supporting your financial goals for years to come.
Ready to start earning your monthly income from a 10 lakhs investment? Take the first step today by exploring these options and creating your personalised investment plan.
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.