Monthly Income Schemes(MIS)

Monthly income schemes are financial plans where you invest a lump sum to earn steady, predictable income through regular payouts. Popular low-risk options in India include POMIS, SCSS, and bank FDs.
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Monthly Income Schemes
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3 mins
26-June-2026

Financial peace of mind is not a luxury—it is a necessity, especially if you are planning for retirement or simply want a consistent income from your investments. Monthly Income Schemes (MIS) are ideal for those who value regular returns with low-to-moderate risk. These schemes invest in instruments like debt funds, fixed deposits, and government savings plans. In this guide, we will walk you through the best options available, highlight their benefits, and help you choose the right plan based on your needs.

What is monthly income scheme?

A monthly income scheme is an investment plan designed to provide investors with regular monthly payouts. These payouts are generated from the returns or interest earned on the invested amount and depend on factors such as the applicable interest rate and the size of the investment. Such schemes aim to create a steady income stream, making them suitable for individuals seeking regular cash flow from their investments. Monthly income schemes can take various forms, including fixed-income instruments, annuity plans, and systematic withdrawal plans (SWPs) offered by mutual funds.

How does a monthly income scheme work?

A Monthly Income Scheme (MIS) is designed to generate a regular stream of income from a one-time investment. Under this arrangement, you invest a lump sum amount, which earns interest or returns over a specified period. These earnings are distributed to you as monthly payouts, helping create a stable and predictable source of income.

How a Monthly Income Scheme works

  • You invest a fixed amount in the scheme as a one-time deposit.
  • The invested funds generate returns based on the scheme's applicable interest rate or investment performance.
  • The earned returns are paid to you at regular monthly intervals.
  • The principal amount remains invested throughout the chosen tenure.
  • Upon maturity, the original investment is returned, subject to the terms and conditions of the scheme.

By offering consistent monthly payouts while preserving the principal amount until maturity, a Monthly Income Scheme can be a suitable option for individuals seeking financial stability and a dependable income stream.

What are the key features and benefits of monthly income schemes?

Monthly income schemes are crafted to provide reliable cash flow while maintaining capital safety. Here’s a look at what makes them attractive:

Regular Income

One of the standout features is the consistent monthly payout. Depending on the scheme, this could be either interest income or partial withdrawal from the invested amount, ensuring that your day-to-day expenses are covered.

With non-cumulative FDs by Bajaj Finance, you can get assured monthly payouts and enjoy returns up to 7.75% p.a. Invest now.

Flexible Premium Payment

Investors can choose how they want to fund their MIS:

  • Regular Contributions: Pay monthly, quarterly, or annually based on your comfort.
  • One-time Lump Sum: Invest once and enjoy long-term income without follow-ups.
  • Limited Term Plans: Some schemes allow you to pay premiums for a shorter period but continue receiving payouts for longer.

Customisable Payout Options

Schemes offer flexibility based on your goals:

  • Guaranteed Income: For fixed, predictable monthly returns.
  • Growth-oriented Plans: Market-linked plans that provide capital appreciation along with income.
  • Hybrid Models: A mix of lump-sum and monthly payouts tailored to different life stages.

Tax Benefits

Many MIS options provide tax deductions under Section 80C or allow for tax-free income payouts—adding another layer of efficiency to your investments.

Fixed Deposit

  1. Trusted by over 5 lakh customers
  2. Fixed Deposits worth more than Rs. 50,000 crore booked
  3. Rated CRISIL AAA/STABLE and [ICRA]AAA(STABLE)
  4. Up to 0.35% p.a. extra interest offered for senior citizens
  5. Flexible interest payout options available - Monthly, Quarterly, Half-yearly, Annually or at Maturity

By proceeding, you agree to our Terms and Conditions

Types of monthly income schemes

Monthly Income Schemes (MIS) are available in a range of options to suit varying investment objectives, income needs, and risk preferences. These schemes are structured to generate regular payouts while aiming to safeguard the invested capital, making them a popular choice among retirees, risk-averse investors, and those seeking a steady source of income.

Since each type of MIS offers a different balance between risk and return, it is important to understand their features before investing. Evaluating factors such as expected returns, investment horizon, liquidity, and risk tolerance can help you select a scheme that aligns with your financial goals and income requirements.

Fixed Deposit (FD)

Fixed Deposits are one of the most dependable options for monthly income. Offered by banks and NBFCs like Bajaj Finance, they deliver guaranteed returns over a fixed term.

Benefits:

  • Pre-determined interest rate
  • Flexible tenures (12–60 months)
  • Choice of monthly interest payouts
  • High safety with AAA credit ratings

Start your Bajaj Finance FD journey online in minutes with an investment starting as low as Rs. 15,000.

Senior Citizen Fixed Deposit

Tailored for individuals above 60, this FD offers higher interest rates—ensuring dependable income during retirement.

Features:

  • Monthly or quarterly interest payout
  • Investment range: Rs. 15,000 to Rs. 3 crore
  • Additional rate benefit for senior citizens
  • Option to avail a loan without breaking the FD

Senior citizens can earn up to 7.75% p.a. on Bajaj Finance FDs—one of the highest returns in the category. Open FD.

Mutual Funds with SWP

A Systematic Withdrawal Plan (SWP) in mutual funds allows you to withdraw a set amount regularly while the rest of the corpus remains invested for growth.

  • Withdraw monthly, quarterly, or yearly
  • Ideal for those seeking capital appreciation with liquidity
  • Returns depend on market performance

Post Office Monthly Income Scheme (POMIS)

A government-backed offering with guaranteed interest payouts, POMIS is suitable for risk-averse investors looking for stability.

Pros:

  • Fixed returns for a tenure of 5 years
  • Low minimum investment (Rs. 1,000)
  • Safe and government-guaranteed

National Pension System (NPS)

Primarily a retirement product, NPS allows you to build a pension corpus and get monthly payouts post-retirement through annuity purchase.

Highlights:

  • Tax benefits under Section 80C and 80CCD(1B)
  • Choice of equity and debt allocation
  • Partial withdrawals allowed for emergencies

National Savings Certificate (NSC)

Though not a traditional monthly income plan, NSC is great for long-term investors who prefer safety and tax benefits.

Details:

  • Government-backed, fixed interest rate
  • Tax deduction under Section 80C
  • Lock-in period of 5 years
  • No monthly payout, but reliable capital growth

Fixed deposit variants

Highest Credit Ratings | Trusted with over 1.4 million Deposits | Assured Returns on FD
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Fixed Deposit - 60 Months

INTEREST RATES UP TO
7.75% p.a.
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Fixed Deposit - Senior Citizen

INTEREST RATES UP TO
7.75% p.a.
Invest Online

Fixed Deposit - Age below 60

INTEREST RATES UP TO
7.40% p.a.
Open FD

Fixed Deposit - Minor

INTEREST RATES UP TO
7.40% p.a.
Open FD

Fixed Deposit - HUF

INTEREST RATES UP TO
7.40% p.a.
Open FD

Fixed Deposit - Sole Proprietor

INTEREST RATES UP TO
7.40% p.a.
Open FD

Also Read: Marriage Investment Plans

Why should you choose a Monthly Income Scheme (MIS)?

Regular Income

The biggest benefit of MIS is predictable monthly cash flow, ideal for retirees or those who need a secondary income stream.

Financial Security

With structured payouts and capital protection (in most cases), MIS provides a financial cushion to manage routine expenses.

Tax Efficiency

Some schemes offer tax-free income or deductions on the principal invested, depending on the instrument chosen.

With Bajaj Finance FDs, you not only earn higher returns but also get the option of premature withdrawal and loan facility in times of need. Check Eligibility.

Taxation of monthly income schemes

The tax treatment of a Monthly Income Scheme (MIS) varies depending on the underlying investment instrument. Although these schemes are designed to provide regular income, the earnings received are typically taxable and are added to your total income for the financial year. In most cases, the applicable tax liability is determined by your income tax slab rate.

Understanding the taxation rules associated with different MIS options is essential for effective financial planning. Evaluating the post-tax returns can help you choose a scheme that aligns with your income requirements and overall investment strategy.

Key factors to consider before choosing a monthly income plan

Choosing the right monthly income plan is not only about looking for the highest interest rate. It is equally important to align the investment with your financial goals, income needs and comfort with risk. Evaluating key factors beforehand can help avoid liquidity challenges, unexpected tax implications or gaps in long-term income planning.

  • Risk tolerance
    Risk tolerance reflects how comfortable you are with fluctuations in returns. Conservative investors may prefer options like Post Office MIS or NSC, while those with moderate risk appetite might consider bank fixed deposits that offer stability with slightly varying returns.
  • Liquidity
    Liquidity determines how easily you can access your funds before maturity. Some options allow premature withdrawal with conditions, whereas long-term schemes may have stricter lock-in periods. Choosing a plan that matches your cash flow needs helps prevent penalties.
  • Investment horizon
    Your investment horizon is the period you plan to stay invested. Short-term options may suit immediate income requirements, while longer-term schemes support retirement or future financial stability. Aligning tenure with goals ensures better financial planning.
  • Minimum investment
    Different schemes have different entry requirements. Checking the minimum investment amount helps you avoid overcommitting funds and allows you to plan contributions based on affordability and expected income.
  • Tax implications
    Monthly payouts are usually taxable under “Income from Other Sources.” However, some instruments may offer deductions or tax advantages. Comparing post-tax returns rather than only headline interest rates provides a clearer picture of actual income.
  • Fees and charges
    Processing fees, service charges or penalties for early withdrawal can reduce net returns. Reviewing all applicable costs helps you make an accurate comparison between different monthly income options.
  • Interest rates
    Interest rates influence the regular income you receive. Government-backed schemes typically offer stable but moderate rates, while certain market-linked options may offer higher returns with additional risk. Evaluating current rates alongside safety is essential.
  • Diversification
    Spreading investments across multiple income-generating options can balance risk and improve stability. Combining safer instruments with growth-oriented options may help maintain consistent income over time.
  • Professional advice
    If you are unsure about selecting a plan, consulting a qualified financial advisor can help align your investment choices with your goals, risk profile and tax considerations.

Conclusion

Monthly income schemes provide a dependable source of funds for individuals seeking steady returns and low-to-moderate risk. Whether you are close to retirement, planning for it early, or simply want to supplement your income, these plans offer structured solutions tailored to your financial goals.

Calculate your expected investment returns with the help of our investment calculators

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Frequently asked questions

Can I get monthly income from a Fixed Deposit with Bajaj Finance?

Yes, Bajaj Finance offers non-cumulative FDs where you can opt for monthly interest payouts, making them ideal for creating a regular income stream. Check rates and invest.

Which scheme is good for monthly income?

The right monthly income scheme depends on your goals and risk comfort. Options like Post Office Monthly Income Scheme, bank fixed deposits, senior citizen savings schemes or conservative hybrid mutual funds are commonly used for stable payouts, depending on eligibility and investment horizon.

How can I get Rs. 5,000 interest monthly?

To earn around Rs. 5,000 per month, you generally need a sizeable investment in an income-generating product such as fixed deposits, post office schemes or income-oriented mutual funds. The exact amount depends on the current interest rate and payout structure.

How to get Rs. 10,000 monthly income?

A monthly income of Rs. 10,000 usually requires higher capital invested across reliable income sources. Investors often combine fixed-income products, government-backed schemes or conservative investment options to create a steady and diversified income stream.

Can I withdraw money from my Monthly Income Scheme?

Withdrawal rules depend on the type of Monthly Income Scheme. Some schemes, such as post office MIS, allow premature withdrawal after a specified lock-in period, usually with a penalty. Mutual fund-based income plans may offer greater liquidity. Always check the scheme's terms and conditions before investing.

How much can I invest in MIS?

The investment limit varies depending on the Monthly Income Scheme. For example, government-backed schemes such as Post Office MIS have prescribed minimum and maximum investment limits, while mutual fund-based income plans may not have a fixed upper limit. Review the scheme guidelines to determine applicable investment restrictions.

Who is eligible for the Monthly Income Scheme?

Eligibility for a Monthly Income Scheme depends on the specific plan. Generally, resident Indian individuals, either singly or jointly, can invest. Certain schemes may also allow investments on behalf of minors through guardians. Investors must fulfil the scheme's age, residency, and documentation requirements to participate.

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Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.