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.