Investment Strategies: How To Invest A Lumpsum To Earn A Monthly Income

by Vinaya HS on October 28, 2010

in Finance

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Mithun asks,

My mom will soon be receiving a lumpsum (around Rs 300,000). How do I invest this lumpsum in her name in order to generate some monthly income? I’ve heard about Monthly Income Plans (MIP). Are they a good option?

Yes. Monthly Income Plans are the way to go — but I’d recommend that you opt for a Monthly Income Scheme from the neighboring Post Office (PO MIS; fixed and guaranteed monthly income) as opposed to a Monthly Income Plan from a Mutual Fund (variable and non-guaranteed monthly income).

For Rs 300,000, the income from the PO MIS works out to Rs 2,000 each month. Capital preservation plus a guaranteed monthly income. You can’t go wrong with the PO MIS.




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{ 3 comments… read them below or add one }

Minal October 28, 2010 at 10:07 PM

Hey Techie- since when did you start imparting investment gyan? I might also need a few lessons though.

Girish October 28, 2010 at 10:30 PM

Hi Vinaya,
Is there any locking period for this PO MIS?, can it be cancelled if there is a urgent need of money? Keep the blogs flowing….
Thanks,
Girish

Ajay November 3, 2010 at 6:06 PM

@Girish,
You can break the PO MIS if you need cash, but there is a penalty for the same.
You can read more about it here http://www.indiapost.gov.in/Banking.html

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