Many people in India dream of earning a steady monthly income without relying solely on a traditional job. Whether it’s to supplement your current income or to make your savings grow, investing in the right schemes can help you achieve your financial goals. One such scheme offers a monthly payout of ₹20,000, providing you with the perfect opportunity to earn a passive income.
In this article, we’ll explore the various investment options and schemes available to earn ₹20,000 monthly. Whether you’re a beginner in the world of investments or a seasoned investor looking for stable income, this guide will provide actionable insights, detailed explanations, and real-world examples to help you make informed decisions.
Earn ₹20,000 Every Month
| Key Topic | Details |
|---|---|
| Target Monthly Income | ₹20,000 per month |
| Investment Options Discussed | National Pension System (NPS), Post Office Monthly Income Scheme (POMIS), Senior Citizens Savings Scheme (SCSS), Monthly Income Plans (MIPs), Annuity Plans, Systematic Withdrawal Plans (SWP), Dividend-Paying Stocks |
| Estimated Monthly Payout | ₹20,000 achievable with varying investment amounts and strategies |
| Best for | Long-term investors, senior citizens, and individuals seeking passive income |
| Risk Level | Low to moderate depending on the scheme |
| Official Sources | Policy Bazaar, Groww, HDFC Bank |
Achieving a steady income of ₹20,000 per month through investments is very much within reach, provided you choose the right investment strategies. Whether you prefer low-risk options like POMIS and SCSS or are open to market-linked returns from NPS, MIPs, or SWPs, there are various paths you can take based on your risk appetite and investment horizon.
Always do your due diligence, assess your financial goals, and consult a financial advisor to build a diversified portfolio that works best for you. With the right strategy and discipline, you can secure a reliable monthly income and achieve financial independence.
Understanding the ₹20,000 Monthly Income Goal
When you aim to earn ₹20,000 monthly, it’s important to choose the right kind of investments that suit your needs. Achieving this income might involve initial capital, but with consistent investments and strategic planning, it is definitely possible. The key is choosing the right tools that provide both stability and returns.
To help you get there, here’s a breakdown of some of the most effective investment schemes to earn ₹20,000 monthly.
1. National Pension System (NPS)
The National Pension System (NPS) is a government-backed retirement savings scheme that offers market-linked returns. It is primarily designed for long-term wealth accumulation with the benefit of tax advantages.
- How it works: By contributing regularly to your NPS account, your money is invested in equity, corporate bonds, and government securities. The returns are market-dependent but have historically averaged around 8-10% annually.
- How to achieve ₹20,000/month: To earn ₹20,000 monthly from NPS, you would need to accumulate a corpus of approximately ₹40-50 lakh, depending on the returns from your investments.
For example, if you contribute ₹5,000 every month to your NPS account from the age of 30, assuming a return of 9%, you could accumulate about ₹1.2 crore by the time you retire at 60. From that corpus, you could easily generate ₹20,000 monthly.
For more detailed information, check out the official NPS site.
2. Post Office Monthly Income Scheme (POMIS)
The Post Office Monthly Income Scheme (POMIS) is one of the safest investment options available, offering a guaranteed return with low risk. It is backed by the Indian government, making it a risk-free investment avenue.
- How it works: POMIS offers an annual interest rate of 7.4%, paid out monthly. The maximum investment for a single account is ₹4.5 lakh, while a joint account can invest up to ₹9 lakh.
- How to achieve ₹20,000/month: To achieve ₹20,000 in monthly income through POMIS, you would need to invest ₹32.5 lakh, which would give you a monthly payout of around ₹20,000 at the current interest rates.
This scheme is ideal for those who are looking for low-risk, stable returns, especially senior citizens or people looking for safe, predictable income.
For more details, visit the India Post website.
3. Senior Citizens Savings Scheme (SCSS)
The Senior Citizens Savings Scheme (SCSS) is specifically designed for senior citizens aged 60 years or above. It provides attractive interest rates, along with government backing, ensuring low risk.
- How it works: The scheme offers an interest rate of 8.2% per annum, payable quarterly. The maximum investment amount is ₹15 lakh for a single account.
- How to achieve ₹20,000/month: By investing ₹15 lakh in SCSS, you can earn ₹30,500 per quarter, or approximately ₹10,000 per month. To achieve ₹20,000 monthly, a second investment or additional income streams would be needed.
SCSS is a great option for those looking for a predictable, safe investment with quarterly payouts.
Learn more on the SCSS official page.
4. Monthly Income Plans (MIPs)
Monthly Income Plans (MIPs) are mutual funds that primarily invest in debt instruments but may have some exposure to equities for higher returns. These funds offer regular payouts and are suitable for investors seeking steady income with moderate risk.
- How it works: MIPs typically invest in bonds and other debt securities, but some portion is invested in equities to generate higher returns. The payouts vary based on the performance of the underlying assets.
- How to achieve ₹20,000/month: For MIPs, you would need to invest approximately ₹15-20 lakh, depending on the scheme’s returns. An average return of 8-9% per annum would yield around ₹20,000 per month.
Explore MIPs through platforms like Groww or HDFC Mutual Fund.
5. Annuity Plans
Annuity plans offer regular payouts in exchange for a lump-sum investment. They can be purchased from insurance companies and offer predictable income for the rest of your life.
- How it works: You invest a lump sum amount, and the insurance company provides you with a fixed monthly payout.
- How to achieve ₹20,000/month: Depending on the plan, an investment of ₹20-25 lakh can generate a monthly income of ₹20,000 or more. The exact amount depends on the annuity rates offered by the insurer.
Annuities are ideal for retirees looking for a guaranteed monthly income without the risks associated with market investments.
For detailed information, visit Policybazaar’s annuity section.
6. Systematic Withdrawal Plans (SWP)
A Systematic Withdrawal Plan (SWP) is a strategy where you withdraw a fixed amount from your mutual fund investment at regular intervals. This is a flexible option where the withdrawal amount and frequency can be adjusted according to your needs.
- How it works: By investing in a mix of equity and debt mutual funds, you can set up an SWP to receive a regular income.
- How to achieve ₹20,000/month: For example, by investing ₹10-12 lakh in equity or balanced funds with an average annual return of 10%, you could set up an SWP to withdraw ₹20,000 monthly.
SWPs are perfect for individuals who want to maintain some exposure to equity markets while ensuring a steady income stream.
Check out Groww for more on SWPs.
7. Dividend-Paying Stocks
Investing in dividend-paying stocks is a powerful way to generate passive income. Many companies distribute part of their earnings as dividends to shareholders, and these payments can be used as a source of monthly income.
- How it works: By selecting blue-chip companies with a consistent track record of paying dividends, you can create a portfolio that provides regular income.
- How to achieve ₹20,000/month: To achieve ₹20,000 monthly from dividends, you would need to invest a substantial amount in high-dividend stocks. For example, investing ₹30-35 lakh in high-dividend stocks yielding 7% annually can provide around ₹20,000 monthly.
Dividend-paying stocks carry a higher risk than fixed-income instruments but can yield higher returns over time.
Additional Considerations
While aiming for a monthly income of ₹20,000 through investments, there are several factors you should consider:
1. Risk Tolerance
Not all investment schemes come with the same level of risk. While schemes like SCSS, POMIS, and NPS are safer, others like MIPs, SWPs, and dividend-paying stocks carry a higher risk due to market fluctuations. Assess your own risk tolerance before making decisions.
2. Investment Horizon
Your investment horizon refers to how long you can leave your money invested. Long-term investments, such as NPS, tend to yield better returns, but they require patience. If you are looking for quicker returns, you may need to consider more liquid and flexible options like SWPs or dividend-paying stocks.
3. Tax Implications
Certain investment options, such as NPS and SCSS, come with tax benefits. However, the income from dividend-paying stocks and MIPs may be subject to tax based on the current tax laws. Be sure to consult with a tax advisor to understand how taxes might affect your returns.
4. Diversification
One of the best ways to mitigate risk is by diversifying your investment portfolio. A diversified portfolio that includes a mix of fixed-income options like SCSS and POMIS, along with higher-risk investments like dividend stocks and SWPs, will balance stability and growth.
FAQs On Earn ₹20,000 Every Month
1. What is the safest investment for earning ₹20,000 per month?
The safest options include the Post Office Monthly Income Scheme (POMIS) and the Senior Citizens Savings Scheme (SCSS). Both are backed by the government and offer guaranteed returns with low risk.
2. How much do I need to invest to earn ₹20,000 monthly?
The amount varies depending on the investment scheme. For example, investing ₹32.5 lakh in POMIS or ₹20 lakh in an annuity plan could generate ₹20,000 monthly.
3. Can I achieve ₹20,000/month with equity-based investments?
Yes, but with a higher level of risk. Using SWPs in equity funds or investing in dividend-paying stocks can help you generate ₹20,000 per month, but returns are not guaranteed and depend on market performance.
