If you have ₹10 lakhs and your primary goal is to earn monthly income without taking high risk, you’re not alone. Many investors, especially retirees, freelancers, and people with irregular income, look for steady cash flow rather than aggressive growth. However, the challenge is balancing safety, liquidity, taxation, and inflation. Keeping money in a savings account offers safety, but the returns are too low. On the other hand, risky products may promise higher yields but expose your principal to volatility.
So, how do you earn regular income while keeping risk under control? Let’s break it down and understand where you can invest ₹10 lakhs for monthly income.
Best Low-Risk Monthly Income Investments in India
There is no single perfect product for everyone, so understanding the available options is crucial.
1. Corporate FDs (with Monthly Payout Options)
Corporate Fixed Deposits are time deposits offered by non-banking companies to raise funds from the public. They function similarly to traditional fixed deposits in terms of structure, but typically offer slightly higher returns due to the additional credit risk carried by the issuing company. Corporate FDs generally offer returns in the range of 7.5% to 9%, depending on tenure and credit rating.
When you invest in a Corporate FD, you are essentially lending money to a company for a specific tenure. In return, the company pays you a fixed interest at regular intervals, which can be chosen based on your income requirement.
Why Corporate FDs Are Used for Monthly Income:
- Offer fixed, contractual interest
- Allow investors to choose monthly, quarterly, or annual payouts
- Low complexity and no market-linked volatility
To reduce default risk, consider issuers with strong credit ratings, preferably AAA or AA+, as certified by recognized rating agencies.
2. Systematic Withdrawal Plans (SWPs)
A Systematic Withdrawal Plan (SWP) lets you withdraw a fixed amount from your investment at regular intervals (e.g., monthly) while the rest stays invested.
How SWPs work:
- You invest a lump sum amount in an instrument that generates periodic returns
- You set up a fixed withdrawal schedule (monthly, quarterly, etc.)
- The principal continues to earn interest while a portion is paid out regularly
SWPs are useful because they allow you to receive a predictable monthly income without fully liquidating your principal. They also allow you to keep the remaining investment earnings, helping your corpus last longer. Additionally, SWPs allow you to adjust the withdrawal amount according to your changing income needs, making them a flexible and practical option for a steady cash flow. Balanced or hybrid funds commonly used with SWPs have historically delivered around 9%–12% annualized returns over medium to long terms.
3. Non-Convertible Debentures (NCDs)
Non-Convertible Debentures (NCDs) are bonds issued by companies to raise long-term capital. They come with fixed interest rates and can be structured to pay interest monthly, quarterly, or annually, making them suitable for income-focused investors.
NCDs generally offer returns in the range of 7.5% to 9.5%, depending on tenure and credit rating. While the interest income is predictable, investors should consider key risks such as credit risk (linked to the issuer’s repayment ability) and liquidity risk (if the debenture needs to be sold before maturity).
To reduce potential risk, investors may consider secured or high-rated NCDs (AAA/AA+) and choose payout schedules aligned with their cash flow requirements.
4. Annuity Products
Annuity plans are insurance-based products that convert a lump-sum amount into a guaranteed income stream. In most cases, these are immediate annuities, meaning payouts begin soon after you deposit a one-time premium. You can choose the frequency of payouts- monthly, quarterly, or annually, making them useful for retirement-style income needs.
Because the payouts are contractually guaranteed, annuity plans offer very low market risk and predictable cash flow. The trade-off is that the invested corpus usually remains locked in, and the effective returns are modest, typically in the 6–7% range. These plans are more suitable for individuals who prioritize certainty and stable income over liquidity or higher returns.
Monthly Income Investments at a Glance
Features | Corporate FDs | SWPs | NCDs | Annuity Products |
Avg Returns | 7.5-9% | 9-12% | 7.5-9.5% | 6-7% |
Nature of Returns | Fixed & contractual | Market-linked & withdrawal-based | Fixed coupon payouts | Guaranteed lifetime income |
Liquidity | Medium (Premature exit penalties) | High (Redeem anytime) | Medium-Low: Can be sold on exchanges but trading liquidity may be limited | Low liquidity with long surrender periods |
Best Suited For | Conservative investors seeking higher rates than banks | Retirees needing flexible, market-linked income through easy mutual fund redemptions | investors comfortable with issuer credit risk | Retirees & investors prioritizing certainty & longevity protection |
Final Thoughts
How you invest ₹10 lakhs for monthly income should be guided by your individual risk appetite, financial goals, and long-term objectives. There isn’t a single formula that works for everyone, and the right mix of products will depend on your priorities, whether it’s stability, liquidity, or potential growth. You can choose from the options we discussed to create a strategy that fits your needs.
For a more personalized approach, you can also connect with Ashvvy Investments to explore how these options could work together for your financial goals.
