10 Best Monthly Dividend Paying Stocks in India 2024
Imagine having a reliable income stream through monthly dividend-paying stocks and investing in top companies. You would receive regular payouts and secure your financial future. This can all be possible with monthly dividend-paying stocks. Today, we will explore the best options for stability and economic security in 2024.
Top Monthly Dividend Paying Stocks in India for 2024
1. Punjab National Bank: The list of the highest dividend-paying Stocks in India starts with Punjab National Bank. It's known for its steady dividends despite the changing banking sector. With the current share price at Rs 124.40, the dividend yield for PNB amounts to 0.52%.
2. Union Bank of India: Union Bank of India, a well-known bank, adds to the list of stocks that pay dividends regularly. In the year ending March 2023, it gave a dividend of 30.00%, which means Rs 3 per share, with the current share price at Rs 153.50.
3. Britannia Industries: Britannia Industries, a big player in the food industry, is known for its stable finances and regular dividend payments, which make it appealing to investors. In 2023, it declared a hefty dividend of Rs 72 per share, which is 7200.00% of its share value. With the current share price at Rs 4911.25, the dividend yield is 1.47%.
These companies exemplify the diverse opportunities available for investors seeking monthly income through dividends in the Indian market.
Understanding Monthly Dividend Paying Stocks
Dividend stocks are investments in companies that pay dividends to shareholders each month. This is instead of the usual quarterly schedule. These stocks provide investors with a steady stream of income. They pay out all year, making them attractive to those who want regular cash.
These companies offer monthly dividends and might often include real estate investment trusts (REITs), business development companies (BDCs) and some dividend-focused mutual or exchange-traded funds (ETFs). These stocks offer a steady income. However, investors should research them well and check the stability of dividend payments.
Risks and Considerations
1. Market Volatility and Dividend Payments: Investors must watch for the risks when investing in monthly dividend-paying stocks. Market volatility can significantly affect stock prices, which, in turn, impacts dividend payments.
2. Non-Guaranteed Nature of Dividends: It's crucial to understand that dividends are not guaranteed. They can be cut or stopped at the company's discretion. This depends on its financial performance and strategic priorities.
3. Balancing Dividend Yield and Growth Potential: If you rely too much on high-dividend stocks without checking the company's growth, you may miss opportunities on assets that grow in value.
4. Risk Mitigation through Fundamental Analysis: You must analyse the company's earnings stability, competitive position, and sectoral health. This is key to reducing the risks of dividend investing.
5. Tax Implications and Returns: Tax law changes on dividends can alter returns. So, it's essential to stay informed about the latest tax policies. Wise investing requires balance. It would help if you considered the possible rewards and the involved risks.
How to Invest in Monthly Dividend Paying Stocks with IndMoney
Investing in monthly dividends and paying stocks through INDmoney is easy. The process is designed for both new and experienced investors.
1. Start by downloading the INDmoney app from your app store. Then, complete the sign-up process, which includes a KYC verification. This step ensures secure and personalised investment options.
2. Once registered, search for the top Monthly Dividend Paying Stocks in India for 2024. They are listed in our recommendations. INDmoney provides detailed analytics and insights for each stock, which help you make informed choices
3. You can easily add selected stocks to your portfolio and set up automatic investments. They will regularly invest in your chosen dividend stocks.
INDmoney also offers expert financial advice and real-time tracking. These features let you track your investments' performance and adjust your portfolio to get the most dividend income.
How Does Taxation of Dividends Work in India?
In India, dividends were tax-free for investors. But this changed in April 2020. Now, dividends are taxed at the individual's applicable income tax rate. This shift means the company gives the dividend and does not pay Dividend Distribution Tax (DDT).
They shift the tax burden to the recipient of the dividend. Investors must add dividends to their taxable income. The tax rate is based on their income slab. Also, a tax deduction at source (TDS) of 10% applies. This happens if the dividend income is over Rs 5,000 in a year. Investors must consider these tax implications because they affect net returns from dividends.
Conclusion
Buying monthly dividend-paying stocks in India is a great opportunity for those seeking a steady income from their investments. The blog provides insights and top picks for 2024. With them, you're ready to make informed decisions. Download the INDmoney app today and start building a portfolio that works for you. Remember, a well-planned investment strategy is critical to maximising your dividend returns. Happy investing!
What is a dividend?
A dividend is the distribution of a company’s earnings to its shareholders. The company’s board sets the amount. It can be paid out in cash or reinvested in additional stock. The dividend yield is a percentage of a company’s share price.
How are monthly dividends taxed?
The tax treatment of monthly dividends depends on your country of residence and the specific tax laws. In many cases, dividends are subject to taxation, but the rate may vary. Consult a tax professional to understand how dividends are taxed in your jurisdiction.
Can I reinvest monthly dividends?
Many companies offer dividend reinvestment plans (DRIPs) that allow you to automatically reinvest your dividends into additional shares of the same stock.
Are there any downsides to monthly dividends?
Yes, there may be various downsides to monthly dividends, like,
Lower Yields: Monthly dividends may have slightly lower yields than quarterly dividends.
Limited Universe: Not all companies offer monthly dividends.
Market Timing: Frequent payouts may lead to behavioural biases related to market timing.
What is an interim dividend?
An interim dividend is a payment made by a company to shareholders before its annual general meeting (AGM) and the release of final financial statements. It usually accompanies interim financial statements and is issued more frequently in the United Kingdom. The company's Board of Directors declares it, subject to shareholder approval. Unlike final dividends from current earnings, interim dividends are paid from retained earnings.
How many times does a company announce the dividend?
Companies can distribute dividends quarterly, annually, or even monthly. They choose based on their preference. The choice of payment frequency is entirely up to the company's choice.