Investing Rs 5 lakh to get a monthly income

I want to buy a mutual fund with a lump sum amount of about Rs 5 lakh and would like to gain a monthly income with growth. The fund shall be of long term.
-- Girish Babu

If you are a first-time mutual fund investor who is not very sure about how mutual funds work, it would be a better idea to hire a mutual fund advisor to take care of your investments. Experimenting with your hard-earned money is not a great idea.

If you are a retired person looking for a primary income to take care of your living expenses, it would be better to opt for government-backed avenues like Senior Citizen Savings Scheme (SCSS) or Post Office Monthly Income Scheme to secure a guaranteed periodic income. Mutual fund schemes do not guarantee any returns, but you can use them to meet your secondary income requirements. Since you are investing for a long-term, you can opt for an equity-oriented hybrid scheme or largecap scheme and manage your withdrawals from the scheme by selling a part of your holding based on the performance of the scheme. If you want more convenience, you can choose the dividend option. It would be a better idea to stagger your investments over a few months or up to a year. You can start a Systematic Investment Plan (STP) or Systematic Transfer Plan (STP) for the purpose.

If you are a conservative investor, who doesn’t want to invest in equity-oriented schemes, you can consider investing in monthly income plans that invest a small part in stocks. The small exposure to equity would help you earn a little extra.

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