Fixed income plans are safe investment options with regular returns and minimum risk. Compared to investing in stock market and mutual funds though it has higher risks, the fixed deposits prove to be less profitable. Therefore, the fixed income plans are best suited for individuals who nearing the retirement period and for those who want good returns with minimum risks.
It is also advisable for all to invest a part of their income in risk free income instruments. Fixed income funds usually have the investor investing money and agreeing to receive a set amount from time to time. Below are 10 of the best fixed income funds.
- Fixed Deposit
In this, a fixed amount deposited for a fixed period of time gives fixed interest returns. Usually the returns can be received monthly, quarterly or yearly based on the plan and the interest rate varies based on the tenure. It is a safe investment option and apt for people looking for low risk financial instruments.
- Monthly income Plan of Mutual Funds (MIP)
MIPs in mutual funds are not fixed and fluctuate at 8 to 9%. This money by the MIP is called dividends and is not taxable.
- Post office Monthly Income Scheme
In this scheme, a fixed amount invested provides fixed monthly income. The interest rate is fixed and the tenure is usually 5 years. At the time of maturity a 5% bonus is added to the capital amount. The limit is 4.5 lacs for an individual and the income is taxable.
- Equity dividend
Buying stocks is a good way of investing for individuals who can tolerate certain amount of risk. The dividends are yearly payouts received when the company performs well.
- Government Bonds
It is one of the safest investment options available. This type of bonds offers 8% returns every 6 months. These are tradable and can be sold in the market. At the end of the tenure period, the principal amount is received back.
- Real estate
A fixed way of getting monthly income is through renting a property. It is a long term investment and high return plan.
- Annuity from insurance plans
It is a long term investment plan for generating monthly income. Returns are dependent on the retirement period and the plan tenure.
- Mutual fund dividends
Apart from equity, mutual funds are also an option for income. The income is through dividends and is on a yearly basis. If you are looking for regular income then it is advisable to invest in various mutual funds beginning at different periods.
- Systematic Withdrawal Plan (SWP) from mutual funds
Unlike the dividends from the mutual funds and the equities, SWP mutual funds involve selling fixed quantity of mutual funds to generate income at systematic intervals.
- Senior citizen saving scheme
The investor has to be a senior citizen (age 60 and above) to invest in this scheme. Interest rate is usually 9% and the tenure is 5 years which can be extended by another 3 years. The fixed income is received quarterly.Read More