How and Where to Invest ₹10 Lakh Rupees for Monthly Income in India

investing 10 lakhs to get monthly income

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 BanksInterest 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 BanksInterest 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 CompaniesInterest 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:

  1. Invest 10 lakhs in debt mutual funds
  2. Set up an SWP to withdraw a fixed amount monthly
  3. 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:

  1. Create a portfolio of 8-10 established dividend-paying companies
  2. Focus on companies with consistent dividend track records
  3. 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:

  1. You register on a platform like LenDenClub
  2. Spread your 10 lakhs across multiple borrowers (diversification is key)
  3. 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 2: Determine Your Monthly Income Needs How much monthly income do you actually need? If you don’t need the entire possible income right away, consider reinvesting some to grow your corpus faster.

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
For mutual funds:
  • Choose between direct (higher returns) and regular plans
  • Set up SWPs for monthly payouts
For FDs:
  • 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

  1. Chasing the highest returns without considering risk – Higher returns always come with higher risk
  2. Ignoring tax implications – Different investments have different tax treatments
  3. Not accounting for inflation – A 7% return means just 1-2% real return after inflation
  4. Putting all money in one investment type – Diversification is crucial for managing risk
  5. 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.

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.


*Calculated as per the last 6 months’ average returns by lenders who lent for 12 months tenure

LenDenClub, operated by Innofin Solutions Pvt Ltd (ISPL) is registered as a peer-to-peer lending non-banking financial company (“NBFC-P2P”) with the Reserve Bank of India (“RBI”). The Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by Innofin Solutions Private Limited, and does not provide any assurance for repayment of the loans lent through its platform.

LenDenClub is an Intermediary under the provisions of the Information Technology Act, 2000 and virtually connects lenders and borrowers through its electronic platform via the website and/or mobile app.

The lending transaction is purely between lenders and borrowers at their own discretion, and LenDenClub does not assure loan fulfilment and/or lending simple interest. Also, the information provided on the platform is verified or checked on the best efforts basis without guaranteeing any accuracy of the data/information verification. Any lending decision taken by a lender on the basis of this information is at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower, fully or partially. The risk is entirely on the lender. LenDenClub will not be responsible for the full or partial loss of the principal and/or interest of lenders’ lending amounts.

*This is an annualized yield and is subject to the maximum FMPP tenure, which is 5 years. P2P lending is subject to high risk and may cause an entire loss of principal.
 

*P2P lending is subject to risks. And lending decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

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