Find your suitable insurance plan
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You can choose to invest in a low-risk or high-risk investment option for investing INR 10 lakh so that you can get better returns. Depending on your appetite and the amount of risk you are willing to take, you can invest in FDs, PPFs or even Mutual Funds to gain benefits according to your requirement.
Let’s explore various investment options in different categories in this post.
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Now, with a good amount like INR 10 lakh, it is important to consider well while making an investment. There are two things to note here while making the decision. The first thing is the return that you can earn from the investment plan and the second thing is to remember that with high returns you are likely to have greater risks too.
So, it is necessary to pick the option looking at the returns along with other features like risk involved, tenure of the plan and investment company among others. You can also look for monthly return investment plans if you want a regular income every month. So, let’s take a look at how to invest INR 10 lakh for greater returns.
Several factors determine how much you can earn from an INR 10 lakh investment, such as;
Fixed deposits (FDs), government bonds, and post office monthly income schemes (POMIS) are plans that are low in risk. You can expect an annual return of 7-8% return per year on these plans. These are stable plans that offer relatively low returns as compared to high-risk plans.
On the other hand, stocks and mutual funds are the plans that generate high returns. These are high-risk plans and need a demat trading account of the investor for trading.
Here are investment options for regular monthly income:
| Investment plan | Risk involved | Returns on investment | Monthly income | Yearly income |
| Fixed deposit (FD) | Low | 8% | 6,700 | 80,000 |
| POMIS | Low | 7.4% | 6,200 | 74,000 |
| Government Bonds | Low | 8% | 6,700 | 80,000 |
| MIP Mutual funds | Moderate | 9% | 7,500 | 90.000 |
| SCSS | Low | 8.2% | 6,800 | 82,000 |
| Mutual Fund SWP | High | 12% | 10,000 | 1,20,000 |
| Dividend Stocks | High | 10% | 8,300 | 1,00,000 |
| Options Trading | High | 5% monthly | 5,000 | 60,000 (on 1 lakh) |
| Corporate bond | Moderate | 10% | 8,300 | 1,00,000 |
Here are some investment plans for INR 10 lacs. Let’s first consider the low-risk investment plans.
When it comes to a safe and low-risk investment plan offering reasonable benefit, FD or fixed deposit is the first option that comes to your mind. FDs are available in almost every bank and post office in India where you can deposit the amount of INR 10 lakh for a particular tenure to gain maximum return. The interest rate offered under the plan varies from 3 to 6 % depending on the financial institution. This guaranteed return plan is suitable for people who do not want to take risk and at the same time want to make a decent income with the amount. Further, if you want regular income, it serves the purpose of investment with monthly returns.
Fixed Deposits
| Pros | Cons |
| Risk-free investment | Low returns as compared to many other options |
| Assured returns | Interest income is taxable |
| Best for risk-averse investors | |
| Fixed returns |
Like an FD, RD or Recurring Deposit is another safe plan to invest. However, in this plan, you can invest an amount in instalments over the tenure of the policy. However, the returns in this plan are slightly less than in the case of FDs because you invest the amount in instalments. People who are looking at investing in different options by splitting the amount can avail this plan.
| Pros | Cons |
| Useful for short-term goals | Low returns as compared to many other options |
| Ease of investment | No withdrawal unless the deposit term is over |
| Available online | Must pay a particular amount every month |
There are some term policies which allow return of premium options. If you invest in such plans, you would get the premiums paid at the end of the policy term. However, the returns under such plans are not that high.
| Pros | Cons |
| Pays back all premiums if the insured outlives the plan | High premium payment as compared to term plans without returns |
| Earn tax benefits | The returns can be received only if the insured survives the plan |
| Nominee receives death benefit if insured dies during policy term | Benefits can be earned only when the policy stays active |
| No change in the premium amount |
SGBs or Sovereign Gold Bonds are government securities offered in terms of grams of gold. The RBI or Reserve Bank of India offer such bonds which are offered for a tenure of eight-years. This plan allows the investor to invest a corpus equivalent to the value of gold as per the rate at the time of buying the plan.
| Pros | Cons |
| Safe investment | Low returns as compared to many other options |
| Regular payment of interest | Limited premature exit options |
| Help to diversify investment portfolio | |
| Reduce overall risk |
Contrary to low-risk plans, the high risk-plans allow high returns. However, they are available with high risk. Some of these policies are:
Mutual funds are some high-risk investment plans that offer very high returns irrespective of the tenure of the plan. However, the returns in this case depend on market conditions. Hence, it may be risky to invest an entire sum of INR 10 lakh in Mutual funds. Rather, one may split the fund and invest a portion in this fund. These plans are called systematic investment plans. You may also invest in ULIPs or Unit-Linked Insurance Plans.
| Pros | Cons |
| High returns as compared to POMIS and FDs | High in risks |
| Best for people with moderate risk appetite | No guarantee of a return |
This account is meant for the security of a girl child. So, an investor can open this account only if he/she has a girl child. The plan has a yearly upper limit of INR 1.5 lakh and the interest rate offered under the scheme is 7.6%, which is revised by the government on quarterly basis.
| Pros | Cons |
| Secure plan with guaranteed returns | The lock-in period doesn’t allow to withdraw deposits |
| Earn tax benefits | The rate of investment keeps changing every year |
| Secures the life of your girl child | INR 1.5 lakh is the maximum investment limit per year under the plan |
2. Pros & Cons of Public Provident Fund (PPF)
PPF is another investment option offered by each and every bank and post office in India. Here also, the investment allowed on a yearly basis is up to INR 1.5 lakh. The plan comes with a tenure of 15 years. The interest rate varies every quarter and at present is around 7.1%. However, the plan comes with a lock-in period of 15 years, which is a drawback of the plan.
| Pros | Cons |
| Safe investment plan | Corpus may not be very high |
| Guaranteed returns | Longer lock-in period |
| Tax benefits | INR 1.5 lakh is the maximum investment limit per year under the plan |
| Allow the investor to invest as per their comfort |
3. Pros & Cons of Kisan Vikas Patra (KVP)
Kisan Vikas Patra can be used for long-term savings by making small investments at a time. This is a low-risk plan that offers guaranteed returns where your investment doubles within a tenure of 123 months. The plan offers an interest rate of 7.0%.
| Pros | Cons |
| Safe investment plan with low-risk | Long investment term |
| Guaranteed returns | Interest rate keeps changing |
| Tax benefits | Inflation risk is there |
| No upper limit on the investment amount | Premature withdrawal is not allowed |
4. Pros & Cons of Digital Gold
Under the digital gold option, a particular amount of gold depending on the amount invested is purchased and stored in a digital vault. Being a liquid investment, it allows the investor to sell the gold and get the money at any time. So, with this scheme you can avoid the making charges while buying gold from jewellers.
| Pros | Cons |
| Allow a secured storage option | Absence of a governing body |
| No lower limit to invest under the plan | Storage time limits are there |
| Can be used as collateral | An upper limit to investment |
| Ease of movement from one asset to another |
To Sum Up
As mentioned above, there are various investment plans that can be used for investing 10 lakhs to get monthly income. It is better to make an informed decision while starting your investment journey. In fact, there are many other options of investment available that you can choose as per their pros and cons and your requirements. You can look for the best one-time investment plan with high returns. It is very important to start investing early on in life to have a secured future.
Browse Mahindra Paybima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance, and Investment section. You can visit Mahindra Paybima to Buy Insurance Online.
Yes, you can invest money online. Every bank offers the facility of internet banking, which can be used to invest online. Banks also have their own mobile applications that the customers can use to start investment.
In most cases, the rate of gold keeps changing and it is quite volatile. Hence, investing in gold may not be fruitful in the short-term. However, it might serve the purpose in case of long-term investment.
Be it investments or savings, both offer returns. However, savings accounts offer low rates of interest as compared to investments. But at the same time, savings are very secure, but other investments are prone to risks.
Yes, there are several schemes which can be availed by investors to receive guaranteed income on a monthly basis. For instance, FDs can be used as one of the best investment plans for monthly income.
Every individual should save or may invest at least 20% of their income per month.
Surrendering an investment in the middle of the tenure is not advisable. It may levy penalty charges and may not give you any return.
PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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