Are you looking for a way to make your money work for you, month after month? How can you turn your savings into an additional source of income, whether to supplement your monthly budget, finance a project, or prepare peacefully for your retirement? You might be wondering what the best investments are to generate regular income, what risks are involved, and how to build a strategy that truly suits you.
The quest for a passive monthly income is a powerful financial goal. Fortunately, several solutions exist, ranging from the most secure to the more dynamic. From real estate to financial markets, including tax-advantaged options such as life insurance, it is entirely possible to structure your assets to pay you a regular annuity. Let us explore the different options for investing your money and making it grow each month.
Secure investments for a monthly income: an achievable goal
When thinking of regular income, safety is often the first criterion. The idea is to receive a predictable amount without risking your capital. While absolute security is often synonymous with more modest returns, some smart solutions allow you to reconcile both.
Regulated savings accounts: a false good idea?
Savings accounts such as the Livret A or the Livret de Développement Durable et Solidaire (LDDS) are often the first reflex of French savers. Their capital is guaranteed by the State, funds are available at any time, and the interest is completely tax-exempt. However, there is a crucial point to understand: these accounts do not pay monthly income.
Interest is calculated twice a month (according to the "quinzaine rule") but is credited to your account only once a year, usually on December 31st. To create a monthly income, you must set up a manual strategy: after receiving your annual interest, you can schedule a monthly transfer to your current account to create a "personalized annuity". It is a simple method, but it remains limited by the yield and the ceilings of these accounts.
| Account | 2024 Rate | Ceiling | Interest Payment |
|---|
| Livret A | 3 % | €22,950 | Annual |
| LDDS | 3 % | €12,000 | Annual |
| Livret Jeune | 3 % (or more) | €1,600 | Annual |
With a net return expected to drop to 2.4% in 2025, €10,000 placed on a Livret A would generate €240 per year, or €20 per month on average. It is a start, but insufficient to constitute a true complementary income.
Life insurance and scheduled withdrawals: flexibility above all
Life insurance is one of the most versatile solutions for building a monthly income. Its operation is simple: you invest your money in different supports (secure euro funds, more dynamic unit-linked funds) and, once your capital is built, you set up scheduled partial withdrawals. You decide the amount and frequency (monthly, quarterly) of the withdrawals, which are then automatically transferred to your bank account.
The main advantage of this solution is its flexibility. You can adjust, suspend or resume your withdrawals at any time, depending on your needs. Moreover, life insurance benefits from very attractive taxation. After 8 years of ownership, the gains from your withdrawals benefit from an annual tax allowance of €4,600 for a single person (€9,200 for a couple). This means you can withdraw a substantial amount each year without paying income tax.
Note
For a secure monthly income via life insurance, you can opt for scheduled withdrawals on a contract mainly invested in euro funds. The capital is guaranteed there, and the yield, although moderate (between 2% and 4% on average), ensures a stable source of income without risking your initial investment.
Real estate: a solid asset for regular income?
Real estate investment has historically been associated with receiving regular income: rents. Whether you invest directly or through "paper real estate," real estate remains a preferred option for anyone looking to generate monthly cash flows.
Traditional rental investment
Buying an apartment, a house, or a commercial property to rent it out is the best-known method to obtain monthly income. Each month, you receive rent from your tenant. This income can be used to repay the loan taken out for the purchase, and once the loan is paid off, it becomes net income (before taxes and charges).
This strategy allows you to build tangible assets that can appreciate over time. However, it comes with constraints:
- Property management: finding a tenant, handling unforeseen events, carrying out repairs.
- Risks: vacancy periods (no tenant), unpaid rent, damages.
- Costs: property taxes, condominium fees, maintenance expenses.
- Illiquidity: selling real estate can take several months.
Paper real estate (SCPI): real estate without the constraints
For those who want the advantages of real estate without management drawbacks, Sociétés Civiles de Placement Immobilier (SCPIs) are an excellent alternative. The principle is simple: instead of buying a property, you purchase shares in a company that owns and manages a large real estate portfolio (offices, shops, warehouses, etc.).
The management company takes care of everything: acquisition of properties, tenant search, rent collection, maintenance... In return for your investment, it pays you your share of the collected rents, usually quarterly, but increasingly SCPIs offer monthly payments. It is a very passive solution that allows investment in real estate with much smaller amounts (starting from a few hundred euros) and immediately diversifies your assets across dozens, even hundreds, of properties.
SCPI yields average between 4.5% and 7%, but the capital is not guaranteed and depends on the health of the real estate market.
Financial markets: aiming for higher returns
For those willing to accept a higher level of risk in exchange for the potential of greater returns, financial markets offer several solutions to generate monthly income.
Stocks with monthly dividends
Some companies, especially in the United States (the famous REITs or Real Estate Investment Trusts), have policies of paying dividends to their shareholders each month rather than quarterly or annually. By holding these stocks, you receive a portion of the company's profits directly in your brokerage account.
The advantage is twofold: you receive regular income and can also benefit from potential appreciation in the stock’s value. The investment is highly liquid (stocks can be sold in a few clicks) and accessible with small amounts. The main risk is market volatility: the stock price can fall, and dividends are never guaranteed.
Bonds with monthly coupons
Buying a bond means lending money to a state or a company. In return, the issuer commits to paying you interest (the "coupons") at a defined frequency and to repay your capital at maturity. Some bonds pay these coupons monthly.
This investment is generally considered less risky than stocks because the income is fixed and predictable. The main risks are issuer default (you could lose your capital) and interest rate risk (if rates rise, the bond’s value can fall if you sell before maturity).
The PEA: a tax wrapper to optimize your gains
The Plan d’Épargne en Actions (PEA) is a wonderful tool to invest in the stock market while benefiting from very favorable taxation. After 5 years of ownership, capital gains and dividends generated within the PEA are fully exempt from income tax (only social contributions at 17.2% remain due).
Although the PEA is often associated with a capitalization strategy (reinvesting gains), it is entirely possible to use it to generate income. For example, you can hold dividend-paying stocks or distributing funds and make regular partial withdrawals. Moreover, the PEA allows investment in money market funds, which are very secure placements generating daily interest, offering an effective and tax-optimized alternative to regulated savings accounts.
Expert advice
Do not put all your eggs in one basket! Diversification is the golden rule. The best strategy often combines several of these investments. For example, a secure base with a life insurance euro fund, complemented by SCPIs for passive real estate income, and a more dynamic portion in stocks via a PEA to aim for higher long-term returns.
A new path: combining performance and positive impact
What if your money could not only earn for you each month but also actively contribute to a more sustainable future? This is the promise of impact investing. At Homaio, we open access to a market until now reserved for experts: European carbon quotas.
The idea is simple and powerful: by purchasing CO2 tonnes on the regulated market, you remove them from circulation, thereby preventing polluting industries from using them. By doing so, you contribute to the scarcity of these quotas, encouraging companies to accelerate their ecological transition. Your investment therefore has a real and measurable impact on decarbonization.
But beyond the impact, this is a real financial investment. By reducing supply, you bet on an appreciation in the value of the remaining quotas. This is a capital growth strategy, whose performance you can track in real time on your dashboard. Just like with unit-linked life insurance funds, you can then decide to set up scheduled withdrawals to turn this growth into monthly income. It is an innovative way to diversify your portfolio, combining the potential for financial performance with a strong conviction: that finance must be a lever for the climate.
Comparative table of investments with monthly income
To help you see more clearly, here is a summary table of the different options, their characteristics, and the profiles they suit.
| Investment | Potential Return (Gross) | Risk | Liquidity | Taxation | Ideal for... |
|---|
| Savings accounts (manual annuity) | 2-3 % | None | Very high | Exempt (regulated accounts) | Absolute safety, but very low income. |
| Rental real estate | 3-7 % | Medium (vacancy, defaults) | Low | Rental income (income tax + social contributions) | Building a tangible and lasting asset. |
| SCPI | 4.5-7 % | Low to medium | Medium | Rental income (income tax + social contributions) | Passive and accessible real estate income. |
| Dividend stocks | 3-7 % (+ capital gains) | High | Very high | Flat tax 30% or income tax scale | Boost income with strong potential. |
| Bonds with coupons | 1-5 % | Low to medium | Medium | Flat tax 30% or income tax scale | Fixed and predictable income. |
| Life insurance (withdrawals) | 2-8 % (depending on funds) | Low to high | Good | Very advantageous after 8 years | Flexibility and tax optimization. |
| Impact investment (Homaio) | Variable (capital growth) | Medium to high | Medium | Flat tax 30% or income tax scale | Combine performance and climate contribution. |
Beware of unrealistic promises
Be cautious of offers promising very high monthly returns without any risk. If a proposal seems too good to be true, it probably is. Always take the time to understand what you are investing in, the hidden fees, and the associated risks before committing. High returns are always the counterpart of higher risk.
Investing your money to obtain a monthly income is not an exact science but a strategic approach. There is no single solution, but a multitude of tools at your disposal. The key to success lies in clearly defining your objectives, risk tolerance, and time horizon. By wisely combining different approaches, from the security of life insurance to the innovation of impact investing, you can build a diversified, resilient portfolio capable of providing the additional income you seek. The essential thing is to start, to inform yourself, and to gradually build the strategy that will allow you to make your money a true ally for your life projects.
Frequently Asked Questions about monthly income investments
What are the most secure investments for receiving regular income?
To prioritize security, the two top options are the euro fund of a life insurance contract (with scheduled withdrawals) and income SCPIs invested in resilient sectors (health, logistics). The euro fund offers capital guarantee, while SCPIs, although not guaranteed, spread the risk over many tenants and properties, offering great income stability.
Can you get monthly income with a Livret A?
No, not directly. The Livret A, like the LDDS, pays interest only once a year (on December 31st). To simulate monthly income, you must wait for this annual payment, then organize monthly transfers yourself from your Livret A to your current account. Therefore, it is not a true monthly income investment.
Is it better to have monthly income (distribution) or capitalization?
It entirely depends on your objective. If you are in a wealth-building phase (for example, under 50 and preparing for retirement), it is much more efficient to choose capitalizing investments, which automatically reinvest gains to benefit from the magic of compound interest. This will create a much larger asset over time. If you need immediate additional income (retirement, life project), distributing investments (that pay out income) are more suitable.
How to start investing for monthly income if you are a beginner?
The simplest and safest approach for a beginner is to open a life insurance contract. You can start with a modest initial payment (often from €300) and set monthly contributions to build your capital. At first, favor euro funds to familiarize yourself with the mechanism. Once more comfortable, you can diversify towards SCPIs or unit-linked funds, then activate scheduled withdrawals when your capital is sufficient to generate the desired income.
What is the impact of fees on my monthly income?
The impact of fees is huge and often underestimated. Management fees of 1% or 2% per year may seem low, but over the long term, they significantly reduce your performance. On a capital of €100,000 with a gross return of 7%, a 1.5% annual fee difference represents a loss of €1,500 income per year. It is therefore crucial to compare fees (entry, management, exit) before choosing an investment. Online solutions and ETFs (trackers) are often much cheaper than traditional banking products.
