List of Top Monthly Income Mutual Funds (2026)

Monthly Income Mutual Funds are hybrid schemes that primarily invest in debt instruments, with a smaller allocation to equities, to provide relatively stable income along with limited growth potential. In recent years, monthly income plans in India have managed a sizable asset base across categories, reflecting their use among income-oriented investors. Despite the name, these funds do not offer assured monthly payouts, as distributions depend on scheme performance and the availability of distributable surplus.

List of Best Monthly Income Mutual Funds in India (2026)

Here is a list of the top monthly income mutual funds in India for 2026:

Disclaimer: Please note that the above table is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data on the top monthly income mutual funds is from 4th February 2026. This data is derived from the Tickertape Mutual Funds Screener using the following filters:

• Plan: Growth
• Category:  Conservative Hybrid Funds
• 3Y CAGR: Sorted from Highest to Lowest

🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.

Overview of Top 10 Monthly Income Funds Based on AUM 

Parag Parikh Conservative Hybrid Fund

Parag Parikh Conservative Hybrid Fund, launched in May 2021, invests 75-90% in debt and 10-25% in equity. Managed by Rajeev Thakkar and team, the fund has an AUM of ₹3,212 crore with a 0.64% expense ratio, seeking regular income and long-term capital appreciation.

Kotak Debt Hybrid Fund

Kotak Debt Hybrid Fund, established in December 2003, allocates 75-90% to debt and 10-25% to equity. Managed by Abhishek Bisen and Shibani Kurian, it has an AUM of ₹3,131 crore. The fund aims to enhance returns through moderate equity exposure with 1.66% expense ratio.

ICICI Prudential Regular Savings Fund

ICICI Prudential Regular Savings Fund, launched in March 2004, invests 75-90% in debt instruments and 10-25% in equity. With an AUM of ₹3,359 crore and 1.72% expense ratio, the fund seeks long-term capital appreciation through diversified debt and equity investments.

DSP Regular Savings Fund

DSP Regular Savings Fund, launched in June 2004, maintains 75-90% debt allocation and 10-25% equity exposure. Managed by Abhishek Singh and Shantanu Godambe, the fund has an AUM of ₹180 crore, offering steady income potential with capital preservation focus.

HSBC Conservative Hybrid Fund

HSBC Conservative Hybrid Fund invests 75-90% in debt and money market instruments with 10-25% equity allocation. The scheme seeks reasonable returns through fixed income securities while investing in equity for capital appreciation, requiring ₹5,000 minimum lumpsum investment.

SBI Conservative Hybrid Fund

SBI Conservative Hybrid Fund, launched in February 2001, is among the largest conservative hybrid funds with ₹9,851 crore AUM. It invests primarily in debt (75-90%) and secondarily in equity (10-25%), with 1.54% expense ratio and ₹5,000 minimum lumpsum investment.

HDFC Hybrid Debt Fund

HDFC Hybrid Debt Fund, established in November 2003, allocates 75-90% to debt securities with moderate equity exposure. With ₹3,354 crore AUM and 1.75% expense ratio, the fund seeks income and capital appreciation through balanced debt-equity investments.

Aditya Birla SL Regular Savings Fund

Aditya Birla SL Regular Savings Fund, launched in January 2013, follows 75-90% debt and 10-25% equity allocation. With ₹1,547 crore AUM and competitive 0.93% expense ratio, it aims to provide regular income while seeking capital appreciation through equity exposure.

Aditya Birla SL Regular Savings Fund (Payment)

Aditya Birla SL Regular Savings Fund (Payment) is the IDCW payout option designed for periodic income distributions. It maintains an identical 75-90% debt and 10-25% equity allocation as the growth variant, with dividend payouts subject to distributable surplus availability.

Franklin India Conservative Hybrid Fund

Franklin India Conservative Hybrid Fund invests predominantly in fixed income securities with a maximum 25% equity exposure. Managed by Rahul Goswami and team, the fund has ₹205 crore AUM with 0.77% expense ratio, seeking regular income and selective capital appreciation.

What are Monthly Income Mutual Funds?

Monthly Income Mutual Funds, also known as Monthly Income Plans (MIPs), are mutual fund schemes that aim to provide regular income and moderate growth. Most MIPs are hybrid funds that invest 70–90% in debt instruments like bonds and money market securities and 10–30% in equities to achieve capital appreciation. Some MIPs act as debt-oriented savings funds with little or no equity exposure and focus on stable returns and capital preservation. Despite their name, these investment plans do not guarantee fixed monthly payouts because distributions depend on the fund’s performance and available surplus.

Taxation on Monthly Income Mutual Funds

The taxation on monthly income mutual funds depends on their asset allocation and their holding period. Here’s the taxation on mutual funds:

How to Invest in Monthly Income Plans?

You can easily start to invest in monthly income plans by following these steps:

• To invest in the best monthly income plans, you can visit a mutual fund investment platform such as smallcase.
• The next step is to research and identify the monthly income plans that match your financial goals. Tools like the Tickertape Mutual Fund Screener can help you filter and compare funds based on parameters such as returns, expense ratio, and fund size.
• Once you shortlist the funds, visit smallcase, log in, and search for the fund by name. You can then choose the investment mode, either a one-time lump sum or a mutual fund SIP, and complete the process.

Here are a few popular smallcases among new investors:

Types of Monthly Income Plans

Monthly income mutual funds in India rank among the best investment plans for earning regular income and aiming for capital growth. These are the main types of MIPs that offer steady income to investors.

• Equity Oriented MIPs: These investment plans in India invest mainly in equities and fixed income securities. They aim to deliver higher returns by putting a large part of the portfolio in equities and generating regular income through fixed income instruments.
• Debt Oriented MIPs: These plans focus on fixed income securities such as bonds, debentures, and government securities. They offer a reliable and stable source of regular income with lower risk and aim for some capital appreciation.
• Balanced MIPs: These hybrid mutual funds for monthly income keep a balanced mix of equity and debt instruments. They diversify across asset classes to generate consistent returns and manage risk effectively.

How Do Monthly Income Mutual Funds Work?

Monthly Income Mutual Funds work by combining debt-based income generation with limited equity participation to balance stability and growth. About 70 to 90 percent of the portfolio goes into fixed-income securities such as government bonds, corporate debentures, and money market instruments to generate steady and predictable returns through interest income. The remaining 10 to 30 percent goes into equities that add potential for capital appreciation and can increase returns when markets rise.

How to Use Systematic Withdrawal Plans (SWPs) to Generate Monthly Income?

An SWP is considered one of the best monthly income investment plan for a more dependable approach to earning regular income. A Systematic Withdrawal Plan (SWP) allows investors to withdraw a set amount from their monthly payout mutual funds with a monthly income plan. This provides a structured and reliable method for generating income. Unlike a SIP in monthly income plans, where you invest money in instalments into monthly payout mutual funds, SWPs facilitate regular withdrawals to maintain cash flow.

With an SWP, investors can set up automatic monthly withdrawals to meet their income needs. For example, if you have invested ₹1,00,000 in a mutual fund and wish to withdraw ₹5,000 every month as part of your mutual fund monthly income scheme, you can schedule an SWP. This ensures a steady income flow and answers the question of how to get monthly income from investments. The mutual fund’s NAV (Net Asset Value) at the time of withdrawal determines the number of units redeemed.

Calculate the Number of Units to Redeem: The AMC calculates the number of mutual fund units that must be redeemed monthly to withdraw ₹5,000.

Number of Units to Redeem = Withdrawal Amount / NAV

Number of Units to Redeem = ₹5,000 / ₹20 = 250 units

Redemption Process: At the beginning of each month, the mutual fund will redeem 250 units from the investor’s holdings and credit ₹5,000 to the investor’s bank account.

Adjusted NAV: The mutual fund’s NAV may change after the redemption. Let’s say the NAV after the first redemption is ₹22.

Calculate the New Number of Units: For next month’s withdrawal, the investor needs to calculate the number of units to redeem at the updated NAV.

Number of Units to Redeem = Withdrawal Amount / NAV

Number of Units to Redeem = ₹5,000 / ₹22 = 227.27 units (rounded to the nearest whole unit)

Redemption Process (Next Month): At the beginning of the second month, the mutual fund will redeem 227 units (rounded) from the investor’s holdings at the new NAV and credit Rs. 5,000 to the investor’s bank account.

Features of Monthly Income Mutual Funds 

• Investment in Debt Instruments: MIP mutual funds usually invest 70% to 80% of their portfolio in debt instruments such as bonds, debentures, and money market instruments. The remaining portion goes into equities. They provide two options, Dividend and Growth. The Dividend option pays returns periodically, while the Growth option reinvests returns, which increases the net asset value (NAV).
• Dependence on Market Conditions: A monthly income mutual fund does not guarantee a fixed income return because the dividends depend on the fund’s surplus and NAV performance. The income changes with market conditions and fund performance, which influences how reliable the monthly income plan can be.
• Low to Moderate Risk: A mutual fund monthly income plan fits investors with low to moderate risk tolerance and a medium to long investment horizon. These plans usually offer higher returns than fixed deposits and post office income schemes but lower returns than pure equity fmonthly payout mutual funds, making them balanced investment options.

Benefits of Investing in Monthly Income Mutual Funds

• Steady Income Streams: Monthly income mutual funds focus on generating steady income through low-risk investments. These monthly payout mutual funds deliver regular cash flow and give investors consistent monthly returns. A carefully selected monthly income plan offers dependable distributions to maintain financial stability.
• Tailored to Retirement Needs: The best MIP mutual funds in India that provide monthly income are ideal for retirees. They meet regular income needs and form an important part of a stable retirement portfolio.
• Diverse Equity Exposure: Income-focused mutual funds create a balanced portfolio with different levels of equity exposure. This helps investors match their risk preferences and investment goals.
• Professional Management: Investing in monthly income plans gives investors access to professional fund management. Mutual fund experts manage assets strategically, helping investments align with market conditions and long-term financial objectives.

Risks Involved While Investing in Monthly Income Mutual Funds

• Fiscal Implications and Exit Challenges: Some top MIP mutual fundss in India apply long lock-in periods and charge an exit load for early withdrawals. MIPs mainly invest in debt instruments, so their tax treatment matches that of fixed-income mutual funds.
• Volatility: Even the best monthly income investment options in India experience ups and downs in stock and bond markets, which affect their overall value.
• Interest Rate Impact: When interest rates rise, the value of monthly income mutual funds that depend on debt instruments tends to drop.
• Credit Risk: Companies that issue debt securities in fixed-income mutual funds can default, causing investors to lose money.
• Inflation Risk: In 2025, inflation may grow faster than MIP returns, which can reduce the purchasing power of your investment over time.

Factors to Consider Before Investing in Monthly Income Mutual Funds  

• Define Financial Goals: Assess your financial objectives and risk tolerance. Clearly outline income needs in alignment with potential monthly return mutual funds.
• Performance Analysis: Evaluate the fund’s historical performance across different market conditions. Examine past dividend payment trends and the resilience of these payments during economic uncertainty.
• Fees and Expenses: Consider the fund’s expense ratio and any additional charges. Choose funds with competitive fees to optimise investment returns.
• Manager’s Strategy: Stay informed about the fund manager’s investment strategy and approach. Ensure a clear strategy and effective management while seeking the best investment for a monthly income.

Who Should Invest in a Monthly Income Plan?

• Investors Seeking Regular Cash Flow: MIPs typically appeal to individuals who prefer consistent monthly payouts over lump-sum returns. Retirees transitioning from salary-based income, parents funding a child’s education expenses, or anyone managing recurring financial commitments often explore these plans for their payout structure.
• Those with Lower Risk Appetite: With 75-90% allocation to debt instruments, MIPs generally carry lower volatility compared to pure equity funds. Investors who prioritise capital preservation while seeking modest growth potential may find this balanced approach aligned with their comfort levels.
• Medium-Term Investment Horizon: MIPs work best when held for 3-5 years or longer, allowing the debt component to stabilise and the equity portion to potentially deliver growth. Investors with shorter timelines or those who may need the entire corpus urgently should carefully evaluate if this fits their liquidity requirements.
• Tax-Conscious Investors: The dividend payout structure of MIPs attracts Tax Deducted at Source (TDS) if annual dividends exceed ₹5,000. Investors in higher tax brackets may want to compare the post-tax returns with other income-generating instruments before deciding.

To Wrap It Up…

Monthly-income mutual funds provide a balanced approach to generating regular income while preserving capital. These plans invest in debt and equity instruments, aiming for stable returns with reduced volatility. Investors should assess their risk tolerance and investment objectives before incorporating MIPs.

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Frequently Asked Questions About Monthly Income Mutual Funds