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Can I generate regular income through mutual funds?

Dhirendra Kumar sheds light on alternatives to generate regular income


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I'm now 80 years and have a lump sum of Rs 15 lakh with me. I'm looking for something like Pradhan Mantri Vaya Vandana Yojana (PMVVY) to generate a regular monthly income of Rs 10,000. Is there anything similar in mutual funds?
- Indru

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Yes, you can definitely invest your money in mutual funds. Even, you can go for a very conservative mutual fund and create a systematic withdrawal plan of Rs 10,000 from it.

However, if your need for this money is non-negotiable, then rather than going for a mutual fund, you can opt for a Senior Citizen Savings Scheme (SCSS) where you can invest up to Rs 15 lakh. This scheme comes with a sovereign guarantee and at today's price, it will generate a return of close to little over Rs 10,000. But the only constraint is that you will receive the interest quarterly.

If it is discretionary money and you can do with or without it, then you may consider a conservative mutual fund like an equity saving fund, which invests 30 to 40 per cent in equity and the remaining in a fixed income. Mount your systematic withdrawal plan in such a way that you do not withdraw more than eight per cent. This might provide you with a substantially higher return out of all the discussed alternatives.

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