Top 8 Monthly Income Plans (MIP) – best dividend Mutual funds

Best monthly Income Plan - MIP - best dividend mutual funds

Monthly Income Plan (MIP) in Mutual funds

Monthly income plans (MIP) in mutual funds are alternatives to fixed deposits and post office Monthly income scheme (MIS). These mutual funds provide monthly income by way of dividends based on the performance of the mutual fund. Hence identifying best dividend mutual funds is key for the success of this investment option.

About Monthly Income Plan (MIP) in mutual funds

These are dividend mutual funds which invest largely in bank fixed deposits, bonds, NCD’s, Govt securities etc which provides fixed income. A portfolio mix of 0% to 30% would be invested in equity market thereby getting exposure to stock market. However unlike Bank Fixed deposit or Post office MIS, these MIP mutual funds does not guarantee a fixed return on investment per month. The returns would vary based on the stock market fluctuations and fund’s performance.

Types of Monthly Income Plan (MIP) in mutual funds

There are two types of MIP’s in mutual funds.

  1. Aggressive MIP Mutual fund: They invest 15% to 30% of the fund amount in equity markets.
  2. Conservative MIP Mutual fund: They invests from 0% to 15% of the fund amount in equity markets

To whom these MIP’s suit best

These dividend mutual funds suits best who are new to investing and want to take small exposure to equity markets and maximize the returns for their investment. However the returns on MIP’s would attract dividend distribution tax (approx 14% on returns). Investor should look them as a long term investments which provides opportunity for maximizing the returns.

Liquidity

Since these are like any other mutual funds, an investor can liquidate by paying the exit load (most of the MIP’s charge 1% exit load) on mutual fund investment.

Top 8 Monthly Income Plan (MIP) mutual funds in India

There are several mutual funds in India and the best and top dividend mutual fund schemes are enclosed below.

Best monthly Income Plan - MIP - best dividend mutual funds

Conclusion Remarks: These MIP dividend mutual funds provide higher returns comparing to bank fixed deposits (which ranges between 8% to 9.5%) and post office MIS scheme (which provides 8.5% returns). However look these MIP’s as long term investments of 3 to 5 years so that the returns are maximized.

Readers, what is your opinion on these MIP best dividend mutual funds? Do you see there are any other better monthly income plans which provide higher returns?

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Suresh

Myinvestmentideas.com

Suresh KP

75 comments

  1. My monthly salary is 20000rs. I can invest/save around 14000rs. Can you advise me a mix of conservative and aggressive inveatments

  2. Hi suresh, i am working in abroad soon i am going to retrun back to my home town what i need that how can get monthly income 30-40k per month kindly advice me on this (my investment is up to 20Lac)

    1. Hi Lakshman, If you want monthly fixed income on your investment of Rs 20L, you can invest in FD (9%) which would give you Rs 15K per month, invest in post office MIS scheme which would give you Rs 12.5K per month. Alternatively, if you can take some risk, invest in monthly income plans of mutual funds and you can get more than Rs 15K per month. If you are high risk investor, invest in company FD’s like Mahindra FD schemes or Unitech FD’s which would provide 12% to 15% returns p.a. You would get Rs 20K to Rs 25K per month (paid Quarterly).

      1. Hi Suresh, thank you very much for your suggestions on my request here i would like to clear from you that is there any tax i have to pay on my investment (returns on monthly)

         

        1. Lakshman, All these are pre-tax returns. You should pay tax depending upon the investment option you have selected and depending upon the tax computations for such products. e.g. FD interest, banks would deduct TDS, but you should pay tax as per your income tax bracket. If excess deducted you can claim for IT refund, if less paid, you should pay balance tax seperately. Hence it depends on investment products you select.

  3. Hi Suresh, I want rs2000 every month from my investment. How much do I need to invest. Where should i invest .thanks for your advise.

    1. Hi KS, It depend on which option you are chosing. As indicated in my article, these MIP’s do not guarantee monthly returns, however assuming they are delivering 10% to 11% per annum, you should invest Rs 2.50 Lakhs to get Rs 2K per month (approx)

      1. Hi Suresh thanks for your reply I live in USA and want to help some one by paying 2000 every month just curious if there is any investment plan where I can invest and get guaranteed monthly income if you kmow any of the plans or banks please advise me. Thanks

        1. Hi KS, I can suggest couple of methods 1) Invest in Bank FD through NRE account. You can invest Rs 250,000 and you can achie this goal 2) Invest in Post office MIS scheme for Rs 280,000 and you would get Rs 2,000 per month. However as an NRI, you cannot open post office account directly. If you have spouse or parents in India, you can open joint account or they can open the account in their name. Both are guaranteed return options. 

  4. Hi Suresh,

    HDFC MIP LTP (G) is the best. Currently holding around16,000 units. The nice part of this MF I like is the monthly dividend. HDFC goes on depositing Rs. 0.06 per unit.

    After reading your article, thinking on investing in Reliance MIP.

    Good research.

  5. Kindly adivse monthly income of Rs.50,000 plan with not paying any tax and how much I have to invest

    1. Kumar, I could not understand your question. Are you looking at monthly income plan where you get 50K without any tax? There are no mutual fund options where TDS/Tax would not get deducted. Also monthly income plans does not guarantee monthly fixed income.  You can try tax free bonds where returns are not taxable. These are generally issued during Dec to Mar period

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