Bye Bye Rat Race! Top 10 Ways To Earn Passive Income For Indians in 2025

Passive Income Ideas: Creating a regular monthly income is the priority for most, especially those looking to achieve financial security or retirement planning. There are plenty of investment opportunities in India that can fulfil this requirement. They vary from low-risk schemes approved by the government to market-linked schemes.

Here is the list of the top 10 investment schemes to help obtain a regular monthly income:

Post Office Monthly Income Scheme (POMIS)

Post Office Monthly Income Scheme (POMIS) is a government-backed scheme. It's ideal for cautious investors seeking regular income. POMIS gives you a 7.4% per annum interest rate (monthly payout) for a term of five years. You can invest up to Rs 4.5 lakh as an individual or Rs 9 lakh as a joint holder. The minimum investment is merely Rs 1,500.

Government Bonds

Long-term government securities are a safe method of earning a steady income. They have maturities of five to 40 years. These securities make monthly interest or coupon payments as determined by the government. That makes them suitable for those who wish to retain their capital while receiving a steady income.

Corporate Deposits

Non-banking financial companies (NBFCs) and housing finance companies' corporate deposits can earn high interest rates. They have more convenience than bank deposits but are less safe. You must ensure the health and credibility of the firm before investing.

Monthly Income Plans

Monthly Income Plans or MIPs are mutual funds that invest predominantly in fixed-income products with a minuscule exposure to equities. Though returns are based on the performance of the markets and are not certain, MIPs also have growth and dividend plans. They're suited for those who are ready to accept moderate risks for increased returns.

Pradhan Mantri Vaya Vandana Yojana

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-sponsored scheme for senior citizens. It provides a fixed 7.4% annual interest rate for 10 years. Depending on how you want to receive your payments (monthly, quarterly, half-yearly or annually), you receive regular annuity payments. That guarantees financial security post-retirement.

Life Insurance Plans

Life insurance plans with savings components offer guaranteed monthly payouts after the maturity period. Alongside income, they provide financial protection for your family. These plans are a reliable choice for balancing security and income.

Systematic Withdrawal Plans (SWPs)

Systematic Withdrawal Plans (SWPs) enable you to withdraw a fixed sum from your mutual fund investments at regular intervals. That puts you in charge of your returns. SWPs are suitable for investors who have fluctuating financial requirements—be it steady income or systematic withdrawals.

Equity Share Dividends

For investors with higher risk tolerance, equity share dividends provide a combination of monthly returns and long-term capital appreciation. Investors can achieve steady income by creating a diversified stock portfolio with high dividend-yielding stocks. Dividends, however, are subject to company profits and are not assured.

Annuity Plans

Insurance company annuity plans offer secure monthly income, and hence are a great option for retirees. Depending on the plan, income can be drawn as soon as a lump sum is invested (immediate annuity) or after a certain period (deferred annuity). Although safe, these plans are usually charged with fees and are taxable.

Senior Citizen Saving Scheme (SCSS)

Senior Citizen Saving Scheme (SCSS) is a wonderful choice for seniors over 60. It pays an 8.2% interest annually, paid out in four equal parts every quarter for five years. You can invest up to Rs 15 lakh in banks and post offices. However, the interest you get will be taxable depending on your income tax bracket. That makes SCSS a safe bet for pensioners who seek financial security.

Disclaimer: The views expressed in this article are purely informational and Republic Media Network does not vouch for, promote or endorse any opinions stated by any third party. Stock market and Mutual Fund investments are subject to market risks and readers are advised to seek expert advice before investing in stocks, derivatives and Mutual Funds.