Monthly dividend stocks under 10 in India
Monthly Dividend Stocks Under 10 in India
Are you tired of seeing your savings account earn you just enough interest to buy a cup of chai? You work hard for your money, and it’s natural to want your money to work hard for you. One way to potentially earn a more regular income from your savings is through dividend investing.
Instead of letting your money just sit in a bank, you can use it to buy a tiny piece of a company. When that company earns a profit, it might share a small part of it with you as a “thank you” payment, called a dividend. The best part? You don’t need a fortune. We’re focusing on affordable monthly dividend stocks that can cost less than a movie ticket.
While most companies in India pay dividends annually or quarterly, a select few are structured to provide a regular monthly income. These are often unique investments tied to assets like major highways or large office parks that collect steady, predictable revenue. This consistent cash flow makes it possible for them to pay out to their investors more frequently.
This guide is your roadmap to understanding what a dividend is, how to find these monthly-paying options, and most importantly, how to evaluate the risks before you invest even one rupee. You’ll gain a clear idea of whether this approach is the right next step for your savings.
What are Stocks and Dividends?
When people “buy stocks,” they are buying tiny, equal pieces of a business. Each piece is called a share, or a stock—two words for a small slice of ownership in a company. Large companies from Tata Motors to Infosys sell shares to raise money for growth, like building new factories or creating new products.
When you buy even one share, you become a shareholder, or a tiny part-owner of that business. When the company you part-own does well and has extra cash after paying its bills and reinvesting for growth, it may choose to share a portion of those profits with its shareholders. This cash payment, a sort of ‘thank you’ bonus for your investment and trust, is a dividend.
Most Indian companies that pay dividends do so once a year (annually) or every three months (quarterly). A dividend every single month is very rare for regular stocks, but it is a feature that a special type of investment can offer. A company’s choice to pay a dividend is often a sign of a healthy and stable business, signaling it earns enough to run its operations and consistently reward its owners.
The Secret to Monthly Dividends in India: Meet REITs and InvITs
The key to finding regular monthly payouts often lies with special investments called Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). These are not companies that make products, but professionally managed portfolios that own large, income-generating assets on your behalf.
A REIT (Real Estate Investment Trust) lets you own a tiny piece of a massive, high-tech office park and collect a small share of the rent, often for under ₹500. The trust owns large commercial properties, collects rent from its big-name tenants, and then distributes a large portion of that rental income to investors as dividends.
Similarly, an InvIT (Infrastructure Investment Trust) owns crucial assets that power our country, like highways, power transmission lines, or pipelines. When you drive on a toll road or use electricity that travels through these lines, the fees collected generate the InvIT’s income. A slice of that steady cash is then passed on to its investors.
Because their business model is built on collecting steady fees like rent or tolls, REITs and InvITs can offer more predictable payouts than a company whose sales might fluctuate. This makes them popular for income seekers.
How to Tell if a Dividend is ‘Good’: Understanding Dividend Yield
To know if an investment’s dividend is giving you a good return, use a simple tool called Dividend Yield. It works just like the interest rate on a bank’s Fixed Deposit (FD). If an FD offers 7% interest, you get ₹7 for every ₹100 you deposit. Dividend yield helps you compare different investment options in the same way.
For example, if an InvIT costs ₹100 per share and pays you a total of ₹8 in dividends over a year, its dividend yield is 8%. This metric helps you look past the stock’s price. A cheap stock paying a tiny dividend might have a lower yield—and therefore be a worse deal—than a slightly more expensive one that pays a more generous dividend.
This percentage is a key metric for analyzing dividend stocks. An investment with a 7% yield offers a higher return than one with a 5% yield. However, a high dividend yield doesn’t tell the whole story. Unlike a safe FD, your initial investment in a stock can go down, which is a major risk.
The Biggest Risk of Cheap Stocks: Why a Low Price Doesn’t Mean ‘Safe’
The single biggest risk when investing, especially in affordable stocks, is the dangerous assumption that a low price means low risk. While you are busy collecting monthly dividends, the actual price of the stock can fall. If it falls far enough, you could lose much more than you ever earn in dividends.
Imagine you buy a stock for ₹100. Over the year, it pays you a total of ₹8 in dividends (an 8% yield). But, during that same year, the company’s stock price drops to ₹85. While you gained ₹8, you lost ₹15 on the stock’s value. This drop in your original investment is called a capital loss. In this case, your capital loss wiped out your dividend income, leaving you with a net loss of ₹7.
The goal is for dividends to be a bonus, not a consolation prize. You want to invest in a healthy company where your initial investment is likely to stay safe or grow, in addition to the dividend it pays. A dividend should be the cherry on top of a good investment, not a bandage on a falling one.
Where to Find These Dividend Payers: A Quick Search Guide
Most trading apps come with a powerful tool called a Stock Screener or Filter. Like a filter on an e-commerce site, it lets you scan the market and see only the stocks that match your specific criteria, cutting through thousands of options in seconds.
Using this tool is the first step toward becoming an independent investor. On your trading app (like Groww, Zerodha, or Upstox), you can practice finding potential dividend payers by setting a few simple filters:
- Stock Price: Set to “Less than ₹500” to stick to your budget.
- Sector: Select “Real Estate.” In India, this is an easy way to find REITs, which are frequent dividend payers.
- Dividend Yield: Set it to “Greater than 3%” to see companies sharing a meaningful portion of their income.
This search will give you a small, manageable list of companies to explore. This is just a starting point for your research, not a final shopping list. The screener helps you discover possibilities, but the next step is to understand what each company actually does.
Educational Examples: Indian Monthly/Quarterly Dividend Payers
Note: These are for educational purposes only to serve as case studies, not investment recommendations.
After using a stock screener, you might see a few unfamiliar names. One common example of a REIT in India is Embassy Office Parks REIT. This company is like a giant landlord for big businesses. It owns a portfolio of modern office buildings in major cities and earns steady rental income from its tenants. This consistent rent collection allows it to pay regular dividends.
Another type you’ll see are Infrastructure Investment Trusts (InvITs), such as IRB InvIT Fund. This company’s business is owning and operating a portfolio of toll roads. Every time a car or truck pays a toll to use one of its highways, it generates revenue. Because transportation is a constant need, this income stream tends to be predictable, funding its distributions to shareholders.
These examples show that when you search for dividend stocks in India below 500 rupees, you’re often looking at businesses with steady, recurring income. Each has a unique business model you must understand before investing.
Don’t Miss a Payout: Ex-Date and Record Date Explained
A company sets a Record Date to know who to send dividends to. On this day, the company takes a “snapshot” of all its owners. If your name is in their official shareholder register, you are on the list to get paid.
However, the Ex-Dividend Date is more important for you as a buyer. It is usually one business day before the Record Date and acts as the real deadline. To get the dividend, you must own the stock before the ex-date. If you buy the stock on or after this date, the previous owner receives the dividend, not you.
If you want the upcoming dividend, buy the shares before the ex-dividend date. Understanding this process is crucial to avoid disappointment.
A Quick Note on Taxes for Your Dividend Income
In India, the dividends you earn are considered part of your overall income for the year. The rule is simple: your dividend earnings are added to your other income, like your salary. This combined total is then taxed according to your personal income tax slab (e.g., 5%, 20%, or 30%). There isn’t a special, separate dividend tax; it’s just treated as another source of income.
For a beginner earning small dividend amounts, the process is straightforward. You declare the amount when filing your taxes without needing to perform complex calculations.
Your 3-Step Plan to Start Your Dividend Journey Safely
You now see the stock market as a place where you can own a piece of a business and potentially earn a regular income. Building a dividend portfolio for beginners starts with learning, not just buying. Here is a simple, safe way to begin:
- Research First: Pick one REIT or InvIT and visit its official website. Ask yourself: What does this company own? Do I understand its business?
- Start Small: If you decide to invest, use only a small amount of ‘learning money’—an amount you are fully prepared to lose.
- Be Patient: Building a meaningful dividend income stream takes years, not days. Focus on the habit of learning, not the thrill of a quick profit.
For the patient learner, monthly dividend stocks can be a good investment. By approaching investing as a long-term habit, those small payouts can grow and form the foundation of a strategy like a dividend reinvestment plan. You’re no longer just saving money; you’re learning to make it work for you, one small and steady step at a time.