What are Monthly Investment Plans and Monthly Savings Plans?

  • Savings Plan Articles


In times of financial volatility, it is erroneous to depend only on one's income to pay all expenses and create savings for the future. It is time to examine investment and savings alternatives so that one may create a secure financial future for the family.

One can look at monthly investment plans and monthly saving plans. However, it is important to understand what they are.

Monthly investment plans

Also known as monthly income plans since they provide periodic, monthly returns on investment, these are primarily debt mutual funds that provide steady income. The returns fall under the tax savings bracket of the portfolio and they beat inflation. The invested money is locked in for a period of at least three years.

The features of monthly investment plans are as follows:

  • The money is invested in this manner: A larger component (up to 80%) in Government securities and corporate bonds, and the remainder in equity markets.
  • With a lock-in period of three years, these plans offer excellent indexation benefits. You get profit by way of interest income.
  • The returns are computed basis the inflation and price rise at the time. This results in increase in your tax savings limit. In a stable market, annualised returns may be in the range of 11% and above.
  • They provide relatively low risk returns that are higher than those from traditional instruments like fixed deposits. They are excellent options for novice investors who are not well versed with the workings of the equity markets.

Monthly saving plans

These are small schemes for individual investors who are looking to create a good corpus for the future. The money is deployed in such instruments as post office saving schemes, Public Provident Fund (PPF), Kisan Vikas Patra (KVP) and National Savings Certificate (NSC), among others.

The features of monthly saving plans are as follows:

  • They provide a safe investment instrument for the general public to grow a savings fund. The accumulated corpus can meanwhile be used to mobilise resources for nation building.
  • Most monthly saving plans are operated from the country's post offices, while such schemes as PPF are operated by nationalised banks and some private banks in India. Only a few public sector banks operate deposit accounts for retiring employees.
  • The returns are on monthly saving plans are quite attractive: PPF gets 8.5% interest, for example. The larger the fund of money invested, the higher the returns.
  • The returns are predictable, since the rate of interest on them remains constant throughout the deposit term. This is an excellent feature in a stable market, but it does not beat inflation in a volatile economy.
  • Monthly saving plans are also not very liquid. Though the KVP and Post Office schemes allow liquidity after 1.5 years of the deposit, you have to forgo interest and also pay a penalty clause.


Trending Articles

Popular Articles
View All

Savings Products

ABSLI Assured Income Plus

Invest for a short term, get guaranteed returns for a long term. UIN 109N127V05

  • Guaranteed3 returns on your investment
  • Long term regular income
  • Tax Benefits1

ABSLI Savings Plan

Get life cover and build a substantial corpus to ensure a secure financial future for your loved ones. UIN: 109N088V02

  • Additional Sum Assured on accidental death
  • Bonuses2 to boost your savings
  • Guaranteed3 Additions

ABSLI Vision LifeIncome Plan

Get life cover till the age of 100 as well as an assured income to achieve your financial goals UIN: 109N079V05

  • Get flexibility to receive payouts
  • Life cover till age 100 years
  • Minimum entry age is 30 days

ABSLI Guaranteed Milestone Plan

Guarantee your family’s happiness with life insurance and a savings corpus that fulfils their needs. UIN: 109N106V10

  • Fully guaranteed benefits3
  • Guaranteed3 Additions to boost your corpus
  • Sum Assured of 15 times the annual premium

ABSLI SecurePlus Plan

Secure your finances with life insurance cover and the advantage of a second income stream UIN:109N102V05

  • Flexibility in selecting annual premium
  • Flexibility to choose the Income Benefits
  • Inbuilt Accidental Death Benefit

ABSLI Vision MoneyBack Plus Plan

Pay-outs at regular intervals, coupled with life protection, help you to achieve your life goals. UIN: 109N093V04

  • Financial protection of your family
  • Regular payouts
  • Tax Benefits1

ABSLI Vision LifeSecure Plan

Ensure long-term financial security for your family with this savings-focused life insurance plan. UIN: 109N087V04

  • Life Cover till age 100 years
  • Maturity benefit at the end of policy term
  • Regular bonuses2

ABSLI Monthly Income Plan

Enjoy the twin benefits of adequate life cover and a tax-free monthly income till maturity. UIN: 109N122V02

  • Bonuses2 to augment your savings
  • Choice of Level and Increasing Income Benefit Options
  • Monthly income benefit

ABSLI Income Assured Plan

This plan offers life insurance cover and an assured monthly income for you and your family. UIN: 109N089V06

  • Assured monthly income
  • Life cover
  • Tax Benefit1

ABSLI Vision Endowment Plus Plan

This plan pays out regular bonuses and offers return of premium at maturity. UIN: 109N092V04

  • Accrued regular bonuses2
  • Choice of 2 death benefit options
  • Minimum entry age is 30 days

ABSLI Jeevan Bachat Plan

Get triple advantage of life cover, guaranteed returns and tax benefits. UIN: 109N107V03

  • Guaranteed3 benefits on death or maturity
  • Inbuilt accidental death benefit
  • No medical tests

ABSLI Assured FlexiSavings Plan

Unlock the flexibility to withdraw and lock in guaranteed returns along with a life cover. UIN 109N126V03

  • Guaranteed3 returns on your investment
  • Flexibility of unlimited withdrawals
  • Tax Benefits1

ABSLI Vision LifeIncome Plus Plan

Get guaranteed regular income, cash-in-hand even while paying premiums PLUS life cover up to a maximum of age 100 UIN: 109N131V01

  • *Guaranteed regular income for a period you choose
  • Option to get cash-in-hand even while paying premiums
  • Life cover up to a maximum of age 100

ABSLI Assured Savings Plan

Get life insurance cover and savings benefits to safeguard your family members incase of financial crisis (UIN: 109N134V03)

  • Guaranteed3 benefits on death or maturity
  • Loyalty Additions that boost your maturity corpus year on year
  • Multiple policy & premium payment term options

Need help in buying life insurance?

I agree to the Terms of Usage and Privacy Policy and authorize Aditya Birla Sun Life Insurance Company Limited and its associates to call/SMS/Email/WhatsApp me.

Thank you for your details. We will reach out to you shortly.

1800-270-7000 or reach out to us on this number.

Thank you for your details. Currently we are facing issue in our system.

1800-270-7000 or reach out to us on this number.