Not every investor wants high-risk equity exposure or aggressive wealth creation. For many, stability and consistent income matter more than chasing the highest returns. That’s where steady income mutual funds—especially Equity Savings and Conservative Hybrid Funds—come into play. These schemes blend equity, debt, and arbitrage positions to deliver smoother returns, lower volatility, and regular income potential. In this article, we explore 6 mutual funds that have earned a 5-star rating from Value Research (as on 7-Oct-2025). Each of these funds is designed for investors seeking steady growth with moderate risk, making them ideal choices for 2025.
Earlier we reviewed 13 Wealth Builder Mutual Funds with 5 Star Rating from ValueResearch to invest in 2025.
What are Steady Income Mutual Funds?
Steady income mutual funds generally belong to Equity Savings or Conservative Hybrid categories. They maintain a balanced mix of equity and debt to provide a steady stream of returns. While equity provides growth potential, the debt portion cushions against volatility.
Key features include:
- Regular income potential through dividends or SWP (Systematic Withdrawal Plans)
- Lower volatility compared to pure equity funds
- Suitable for investors with moderate risk appetite
- Tax-efficient compared to fixed deposits
List of 6 Steady Income Mutual Funds with 5-Star Rating
| Fund Name | Category | 5 Yr CAGR (%) | Rating |
|---|---|---|---|
| SBI Magnum Children’s Benefit Fund – Savings Plan | Conservative Hybrid | 13.8 | 5 |
| Edelweiss Equity Savings Fund | Equity Savings | 12.1 | 5 |
| ICICI Prudential Equity Savings Fund | Equity Savings | 10.1 | 5 |
| ICICI Prudential Regular Savings Fund | Conservative Hybrid | 10.8 | 5 |
| Nippon India Conservative Hybrid Fund | Conservative Hybrid | 9.8 | 5 |
| Parag Parikh Conservative Hybrid Fund | Conservative Hybrid | NA (< 5 years) | 5 |
Deep Dive into these Steady Income Mutual Funds with 5-Star Rating from VRO
#1 – SBI Magnum Children’s Benefit Fund – Savings Plan
Fund Objective: To provide steady income and long-term capital appreciation through a mix of debt and equity.
Annualised Returns:
- 1 Year: 4.04%
- 3 Years: 12.51%
- 5 Years: 13.76%
- 10 Years: 12.24%
Fund Details:
- Category: Conservative Hybrid
- Riskometer: Moderately High
- Expense Ratio: 0.85%
- Net Assets: ₹129 Cr
Who Can Invest: Ideal for long-term investors or parents planning for their child’s education or future goals.
Risk Factors:
- Limited liquidity due to lock-in feature
- Moderate exposure to equity volatility
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#2 – Edelweiss Equity Savings Fund
Fund Objective: To generate income and capital appreciation by investing in a mix of equity, arbitrage, and debt instruments.
Annualised Returns:
- 1 Year: 8.30%
- 3 Years: 12.51%
- 5 Years: 12.08%
- 10 Years: 10.03%
Fund Details:
- Category: Equity Savings
- Riskometer: Moderate
- Expense Ratio: 0.60%
- Net Assets: ₹843 Cr
Who Can Invest: Ideal for investors looking for consistent returns with limited downside risk.
Risk Factors:
- Arbitrage inefficiency during low volatility periods
- Interest rate fluctuations can affect debt portion
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#3 – ICICI Prudential Equity Savings Fund
Fund Objective: To provide regular income and capital appreciation through a mix of equity, debt, and arbitrage opportunities.
Annualised Returns:
- 1 Year: 6.80%
- 3 Years: 9.52%
- 5 Years: 10.13%
- 10 Years: 8.94%
Fund Details:
- Category: Equity Savings
- Riskometer: Low to Moderate
- Expense Ratio: 0.50%
- Net Assets: ₹15,863 Cr
Who Can Invest: Suitable for conservative investors seeking equity exposure with minimal volatility.
Risk Factors:
- Limited upside during strong bull markets
- Dependence on arbitrage opportunities for stability
#4 – ICICI Prudential Regular Savings Fund
Fund Objective: To generate regular income through investments in debt, money market instruments, and equities.
Annualised Returns:
- 1 Year: 7.82%
- 3 Years: 11.19%
- 5 Years: 10.83%
- 10 Years: 10.19%
Fund Details:
- Category: Conservative Hybrid
- Riskometer: Moderately High
- Expense Ratio: 0.98%
- Net Assets: ₹3,235 Cr
Who Can Invest: Ideal for investors looking for a blend of debt stability and moderate equity growth.
Risk Factors:
- Equity exposure can lead to short-term volatility
- Credit risk in debt instruments
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#5 – Nippon India Conservative Hybrid Fund
Fund Objective: To provide regular income and capital appreciation by investing in debt and equity with a conservative allocation.
Annualised Returns:
- 1 Year: 8.91%
- 3 Years: 9.94%
- 5 Years: 9.76%
- 10 Years: 6.37%
Fund Details:
- Category: Conservative Hybrid
- Riskometer: High
- Expense Ratio: 1.10%
- Net Assets: ₹902 Cr
Who Can Invest: Suitable for investors seeking higher income potential with some equity risk.
Risk Factors:
- Interest rate risk from bond holdings
- High risk compared to pure debt funds
#6 – Parag Parikh Conservative Hybrid Fund
Fund Objective: To provide steady returns by investing primarily in debt instruments along with selective equity exposure.
Annualised Returns:
- 1 Year: 6.84%
- 3 Years: 12.23%
- 5 Years: — (launched < 5 years ago)
Fund Details:
- Category: Conservative Hybrid
- Riskometer: Moderately High
- Expense Ratio: 0.34%
- Net Assets: ₹2,955 Cr
Who Can Invest: Best suited for investors seeking long-term steady growth with limited volatility.
Risk Factors:
- Short operating history (< 5 years)
- Interest rate fluctuations impacting debt performance
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Comparative Performance Summary
| Mutual Fund Name | 3-Year CAGR (%) | 5-Year CAGR (%) | 10-Year CAGR (%) |
|---|---|---|---|
| SBI Magnum Children’s Benefit Fund – Savings Plan | 12.51 | 13.76 | 12.24 |
| Edelweiss Equity Savings Fund | 12.51 | 12.08 | 10.03 |
| ICICI Prudential Regular Savings Fund | 11.19 | 10.83 | 10.19 |
| ICICI Prudential Equity Savings Fund | 9.52 | 10.13 | 8.94 |
| Nippon India Conservative Hybrid Fund | 9.94 | 9.76 | 6.37 |
| Parag Parikh Conservative Hybrid Fund | 12.23 | — | — |
Conclusion
These 6 steady income mutual funds with 5-star Value Research ratings have demonstrated consistent performance across market cycles. Their combination of debt safety and equity growth makes them suitable for conservative to moderate investors in 2025.
If you’re planning to generate regular income or lower-risk returns, these schemes can complement your core portfolio. However, review your investment horizon, risk profile, and taxation impact before investing.
For investors seeking reliable and steady returns, these funds could be among the best choices for 2025.
Disclaimer: Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing.
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