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My mother, a senior

My mother, a senior citizen, wants to invest about Rs 1 lakh in monthly income

My mother, a senior citizen, wants to invest about Rs 1 lakh in monthly income schemes. She can take some risk in order to improve chances of gains, but not capital erosion. Can you suggest some such schemes? The target, in terms of returns, is around 12 per cent.
- Balasubramanyam

Monthly income plans (MIPs), which are considered as debt funds, involve risk-taking too. With a portfolio in debt (around 80%) and equity, they aim to provide dividends on a monthly basis. The returns are neither fixed nor assured. Since capital erosion is an issue with your mother, why doesn't she consider the Senior Citizens Savings Scheme? With a fixed tenure of 5 years, it would let her earn a fixed return of 9 per cent per annum compounded quarterly.

This article was originally published on May 17, 2010.

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