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.


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 KP


  1. I am retired person I want quarterly dividend from MF . Pl. Suggest best M F which give me regular dividend and growth in principle amount.

  2. Hi Suresh,
    I hv an investment in Birla Sun Life Dynamic Bond Fund – Regular Plan – Dividend (Dividend reinvestment plan) NAV 11.76, Amount-5lakhs approx. Couple of days ago it fell 6% in a day ,what do I do ,shud I book loss & go to another better debt or balanced fund scheme… if so plz suggest which one.

    1. Hi Nishant, These days dynamic bond funds too become risky as they invest in corporate bonds and govt. securities are being traded based on RBI Repo rate. This fund too, took hit due to recent RBI stance about neutral for Repo rate. You should be willing to invest in this fund for 2-3 years to get good returns.

      1. Thanks for ur reply Suresh, plz tell me a great fund whr i can quickly recover this loss and make prfits too,whether its an equity or balanced fund i dont mind exiting & entering that fund…

        thanks again 

  3. As a retired person I like to receive Monthly steady income from my deposits such as in Mutual fund etc. Please give me suggestion of such best Mutual fund.

  4. Hi
    I have rupees 150000 to invest. I want to invest it in a mip agressive funds. Is it a safe investment or still there is risk. A little risk is acceptable to me since it woud invest 15-30% in equity markets. But i want to know whether my remaining 70-85 % investment would be safe. My aim is to buid a passive income source which would continue providing me income even if it is intermittent.

    1. from what I have observed, two funds are doing really good in dividend payout:
      1. DSP Blackrock Balanced Fund (D)- Monthly payout, NAV approx 25.87, 28th Sep 2016 payout: Rs. 0.254/unit.

      It means, for Rs. 10,00,000 invested in this fund, you get 10,00,000/25.87 = 38,654 units. Dividend declared for Sep 2016 is Rs. 0.2540/unit, which gives a monthly income of 38,654*0.2540 = Rs. 9818 for Sep.

      2. SBI Magnum Balanced Fund (D)- Quarterly payout, NAV 27.61, September payout: Rs. 0.70/unit.

      you can do your own calculation if you want to know the returns, except, this is quarterly payout, meaning, monthly payout=quarterly payout/3.

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