9 Best Investment Plans for 10 Lakhs – How to Invest an Amount of INR 10 Lakhs in 2023, India?

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When it comes to investing INR 10 lakh in the best investment plan, there are many banking as well as non-banking financial institutions that you can choose to go with as per your appetite. 

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.

How to Decide Which Investment Option to Choose?

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.

Determining Monthly Income from a 10 Lakhs Investment 

Several factors determine how much you can earn from an INR 10 lakh investment, such as;

  • Investment option you choose to invest
  • Interest rate
  • Return value
  • Other risks

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

What Factors are Considered while Investing INR 10 Lakh on a Monthly Income Investment Plan?

  • Risk appetite of the investor – Understanding your risk appetite is what you need to consider first while investing INR 10 lakh to get regular income. If you seek higher returns, you may go for mutual funds or stocks. However, these are risky options for investment. Likewise, if you are risk-averse, fixed deposits, and post office schemes are some low-risk options for you.
  • Monetary goals – Depending on the objective of your investment, you may decide to invest in a plan. If you want regular income, you can opt for monthly income plans, and if you aim at long-term accumulation of wealth, you may opt for mutual funds and stocks.
  • Investment purpose – The investor should have clarity on the purpose of the investment. You must consider the purpose that you are investing for. Whether it is for your retirement, for the education of children, for a second income, etc., you may choose to invest in a safe or risky investment option.
  • Investment tenure – The tenure of the investment is also important. Tenure is the duration of the plan for which you want to invest your money. If the tenure is long, it is likely to fetch more benefits. FDs and Post Office plans are generally considered for short-term investment, while mutual funds and stocks are opted for long-term plans.
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How to Invest an Amount of INR 10 Lakhs?

Here are some investment plans for INR 10 lacs. Let’s first consider the low-risk investment plans.

A). Low-Risk Investment Plans 

1. Pros & Cons of Fixed Deposits (FD)

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

2. Pros & Cons of Recurring Deposits (RD)

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

3. Pros & Cons of Insurance Schemes with Returns

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

4. Pros & Cons of Sovereign Gold Bonds (SGB) 

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

B). High-Risk Investment Plans

Contrary to low-risk plans, the high risk-plans allow high returns. However, they are available with high risk. Some of these policies are:

1. Pros & Cons of Mutual funds 

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

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C). Some Other Smart Options Where You Can Invest INR 10 Lacs

1. Pros & Cons of Sukanya Samriddhi Yojana (SSY)

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

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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.

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FAQs: Best Investment Plans for 10 Lakhs

Is it possible to invest money 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.

Can I invest in gold? Is gold a good investment option?

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.

Which is good - savings plan or investment policies?

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.

Can we invest on plans to receive monthly income?

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.

How much should an individual invest or save per month?

Every individual should save or may invest at least 20% of their income per month.

Is it good to surrender an investment policy in the middle of the plan?

Surrendering an investment in the middle of the tenure is not advisable. It may levy penalty charges and may not give you any return.

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Mar 14, 2023
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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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