List of Top Monthly Income Mutual Funds – Meaning, Benefits & Risks

Monthly Income Mutual Funds are hybrid schemes that invest primarily in debt instruments and allocate a smaller portion to equities, providing regular income with moderate growth potential. As of August 2025, monthly income plans (MIPs) in India collectively manage an AUM of over ₹85,000 cr across categories. Despite the name, these funds do not guarantee fixed monthly payouts. Their distributions depend on the fund’s performance and the availability of distributable surplus.

List of Best Monthly Income Mutual Funds in India (2025)

Here is a list of the top monthly income mutual funds in India for 2025:

Fund Name	Category	AUM (in Cr)	Expense Ratio (%)	Exit Load (%)	CAGR 3Y (%)
ICICI Pru Regular Savings Fund	Conservative Hybrid Fund	3,235.12	0.97	1.00	10.89
ICICI Pru Regular Gold Savings Fund	FoFs - Gold	2,384.06	0.09	0.5	1.00
HDFC Income Fund	Medium to Long Duration Fund	938.05	0.80	-	7.73
HDFC Hybrid Debt Fund	Conservative Hybrid Fund	3,342.10	1.16	1.00	10.56
Nippon India Silver ETF FOF	FoFs (Domestic) - Silver	1,025.65	0.27	1.00	30.25
DSP Regular Savings Fund	Conservative Hybrid Fund	177.50	0.50	-	10.45
Aditya Birla SL Regular Savings Fund(Payment)	Conservative Hybrid Fund	1,530.65	0.94	1	9.95
Aditya Birla SL Regular Savings Fund	Conservative Hybrid Fund	1,530.65	0.94	1	9.95
DSP Savings Fund	Money Market Fund	5,609.29	0.15	-	7.42
Kotak Savings Fund	Ultra Short Duration Fund	15,667.19	0.37	-	7.38
Franklin Build India Fund	Sectoral Fund - Infrastructure	2,950.12	0.95	1.00	28.08

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. The data is derived from Tickertape Stock Screener and is subject to real-time updates.

Note: The data on the top monthly income mutual funds is from 8th September 2025. This data is derived from the Tickertape Mutual Funds Screener using the following filters:

• Plan: Growth
• 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.

Best Monthly Income Funds: An Overview 

ICICI Pru Regular Savings Fund

A conservative hybrid fund that primarily invests in debt and money market instruments, with limited equity exposure. It seeks to generate stable returns with controlled risk, making it suitable for investors aiming for income generation alongside moderate capital appreciation.

ICICI Pru Regular Gold Savings Fund

A fund-of-funds that invests in ICICI Prudential Gold ETFs, offering indirect exposure to gold prices. It enables investors to diversify their portfolios and hedge against inflation through gold investments, eliminating the need to hold physical assets.

HDFC Income Fund

A debt-oriented fund focusing on government securities, corporate bonds, and money market instruments. It aims to provide regular income and capital preservation while carrying relatively lower risk compared to equity-oriented funds.

HDFC Hybrid Debt Fund

A hybrid fund that allocates most of its assets to debt instruments and a small portion to equities. It seeks to deliver stable income while offering growth potential, balancing risk and returns for medium-term investors.

Nippon India Silver ETF FOF

A fund-of-funds that invests in units of the Nippon India Silver ETF to track domestic silver price movements. It provides an easy way for investors to gain exposure to silver and diversify their portfolios beyond traditional asset classes.

DSP Regular Savings Fund

A conservative hybrid scheme with a focus on high-quality debt instruments and limited equity exposure. It is designed to deliver regular income and modest growth, catering to investors seeking a balance between stability and potential upside.

Aditya Birla SL Regular Savings Fund (Payment)

This hybrid scheme primarily invests in debt and money market instruments, allocating a smaller share to equities. It aims to provide periodic income distributions along with the potential for steady, long-term wealth creation.

Aditya Birla SL Regular Savings Fund

A hybrid mutual fund that invests predominantly in debt and fixed-income securities, with controlled equity exposure. It focuses on delivering consistent returns while maintaining a conservative risk profile, ideal for income-seeking investors.

DSP Savings Fund

An ultra-short-duration debt fund investing in high-quality money market instruments and short-term bonds. It is designed for investors seeking higher returns than those offered by savings accounts, while maintaining high liquidity and low risk.

Kotak Savings Fund

A low-duration debt fund investing in short-term debt and money market securities. It seeks to deliver stable returns with minimal interest-rate risk and provides high liquidity, making it suitable for short-term investment needs.

Franklin Build India Fund

A thematic equity fund that focuses on companies linked to India’s infrastructure and construction sectors. It aims to capitalise on growth opportunities from infrastructure development and policy-driven initiatives, targeting long-term capital appreciation.

What are Monthly Income Mutual Funds?

Monthly Income Mutual Funds, often called Monthly Income Plans (MIPs), are mutual fund schemes designed to provide regular income with moderate growth potential. While many MIPs are hybrid funds that invest 70–90% in debt instruments, such as bonds and money market securities, and 10–30% in equities for capital appreciation, some are debt-oriented savings funds with little to no equity exposure, focusing primarily on stable returns and capital preservation. Despite their name, these high-return monthly income plans do not guarantee fixed monthly payouts; distributions depend on the fund’s performance and available surplus.

How to Invest in Monthly Income Mutual Funds?

1. You can easily invest in monthly income mutual funds by following these steps:
2. To invest in mutual funds, you can visit an equity investment platform such as smallcase or Tickertape.
3. The next step would be to research and identify the best monthly income funds to invest in which align with your investment thesis. You can easily select and learn more about the best monthly income funds with the help of a financial tool like the Tickertape Mutual Fund Screener. With 50+ pre-loaded filters, it helps you to create a comprehensive list by giving insights about the fund’s performance. Try it now!
4. Once you have selected the funds based on different metrics and parameters, go to smallcase.com or the smallcase app, and login via your phone number. Click on ‘Discover‘ and enter the name of the specific mutual fund in the search bar and hit enter. You can click on ‘invest now’ and select whether you want to invest a lump sum amount or start a SIP and start investing!

Here are a few popular smallcases among new investors:

Types of Monthly Income Plans

Monthly income mutual funds in India are among the best monthly income plans, allowing investors to earn regular income while aiming for capital appreciation. Here are the main types of MIP for steady income available to investors:

1. Equity-Oriented MIPs: These investment plans in India primarily invest in equities and fixed-income securities. They aim to generate higher returns by allocating a significant portion of the portfolio to equities while providing regular income through fixed-income instruments. 
2. Debt-Oriented MIPs: These plans primarily invest in fixed-income securities, such as bonds, debentures, and government securities, making them a reliable source of regular income. By focusing on debt instruments, they provide stable income with lower risk while offering the potential for capital appreciation.
3. Balanced MIPs: The best hybrid mutual funds for monthly payouts maintain a balanced allocation between equity and debt instruments. By diversifying across asset classes, they aim to generate returns while effectively managing risk.

How Do Monthly Income Mutual Funds Work?

MIP mutual funds work by combining debt-based income generation with limited equity participation to balance stability and growth. A significant portion of the portfolio, typically 70–90%, is invested in fixed-income securities, including government bonds, corporate debentures, and money market instruments. This allocation aims to provide stable and predictable returns through interest income. The remaining 10–30% is invested in equities, which introduces an element of capital appreciation and can potentially enhance overall returns during market upswings.

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

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

Steps	Details
Initial Investment	₹1,00,000
Monthly Withdrawal Amount	₹5,000
Mutual Fund’s NAV	₹20 per unit
Number of Units to Redeem (Month 1)	Withdrawal Amount / NAV = ₹5,000 / ₹20 = 250 units
Redemption Process (Month 1)	At the start of the month, the mutual fund will redeem 250 units and credit ₹5,000 to the investor’s bank account.
Adjusted NAV (After Month 1)	₹22 per unit (example)
New Number of Units (Month 2)	Withdrawal Amount / NAV = ₹5,000 / ₹22 ≈ 227.27 units (rounded to the nearest whole unit)
Redemption Process (Month 2)	At the start of the second month, the mutual fund will redeem approximately 227 units (rounded) at the updated NAV and credit ₹5,000 to the bank account.

Features of Monthly Income Mutual Funds 

• Investment in Debt Instruments: MIP mutual funds usually allocate 70% to 80% of their portfolio to debt instruments like bonds, debentures, and money market instruments, with the remainder in equities. They offer two options: Dividend and Growth. The Dividend option provides periodic payouts, while the Growth option reinvests returns, reflected in the net asset value (NAV).
• Subject to Market Conditions: It’s crucial to understand that a monthly income mutual fund scheme doesn’t guarantee a fixed income mutual funds return. This is because dividends depend on the fund’s surplus and NAV performance. The income can vary based on market conditions and fund performance, which affects the reliability of any mutual funds monthly income plan.
• Low-Moderate Risk Involved: A mutual fund monthly income plan suits investors with low to moderate risk tolerance and a medium to long-term investment horizon. These typically offer higher returns than fixed deposits and post office monthly income schemes but lower than pure equity funds, positioning them as balanced investment choices.

Benefits of Investing in Monthly Income Mutual Funds

• Steady Income Streams: Low-risk monthly income plans that focus on monthly income can deliver reliable and regular cash flow, providing stability for investors. A well-chosen mutual fund monthly income plan can provide investors with regular distributions.
• Tailored to Retirement Needs: The Best mutual funds in India that offer monthly income are particularly beneficial for retirees, providing a tailored solution to meet their income needs. This feature makes a monthly income mutual fund scheme an essential part of a retirement portfolio.
• Diverse Equity Exposure: Income-generating mutual funds provide the advantage of a diversified portfolio with varying equity exposures. This caters to different risk appetites and investment preferences.
• Professional Management: One of the benefits of investing in mutual funds plans with the best MIP investment strategy is access to professional fund management. Investors leverage the expertise of mutual fund companies, ensuring that investment decisions align with market dynamics and long-term financial goals.

How to Choose the Best Monthly Income Mutual Funds?

• Define Your Objectives: Clearly outline your financial objectives—whether it’s steady income, long-term growth, or both. Determining your needs while considering the top 5 mutual funds in India for monthly income helps you choose the right plan.
• Assess Risk Tolerance: Different best mutual funds in India for monthly income carry varying levels of risk, so ensure the mutual fund plans align with your comfort level.
• Check Historical Performance: Examine the past performance of the top performing mutual funds focused on monthly income. Look for consistency in delivering returns, and check out an MIP mutual fund calculator to estimate potential returns.
• Diversification Matters: You can choose top mutual funds in India with a diversified portfolio to spread risk and enhance stable returns.
• Expense Ratios: Monitor expense ratios in the top-performing MIP funds in India, including MIP for retirement income, as lower costs contribute to higher net returns.
• Distribution Policies: Understand the fund’s payout policies, as some mutual fund monthly income plans may skip monthly payments during challenging market conditions.

Who Should Explore Monthly Income Mutual Funds?

• Retirees: For retirees, income-generating mutual funds or MIP for senior citizens provide a tailored solution for generating regular cash flow.
• Low-Risk Investors: The best monthly income plan in India attracts low-risk investors wanting exposure to the equity market with added stability. These plans offer a balanced approach for those who are looking to invest and get monthly returns.
• First-Time Investors: New mutual fund investors can find an MIP in long-term monthly income investments, which is an accessible entry point with lower risk. When considering where to invest money for monthly income, MIPs provide a structured way to gain market exposure.

However, all investors must conduct thorough research and consult a financial advisor before making any investment decision.financial advisor before making any investment decision.

Risks Involved While Investing in Monthly Income Mutual Funds

• Fiscal Implications and Exit Challenges: Certain top mutual funds in India enforcing extended lock-in periods may charge an exit load for early withdrawals. Additionally, as MIPs predominantly invest in debt instruments, their tax implications align with fixed-income mutual funds.
• Volatility: Even the best investment for monthly income in India faces fluctuations in both stock and bond markets, impacting overall value.
• Interest Rate Impact: Since top performing mutual funds that focus on monthly income depend on debt instruments, rising interest rates can reduce their value.
• Credit Risk: Companies issuing debt securities in fixed income mutual funds might default, leading to investment losses.
• Inflation Risk: Inflation can outpace MIP returns 2025, gradually diminishing the purchasing power of your investment.

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 –

Equity Mutual Funds

Capital Gains Tax	Holding Period	Old Rate	New Rate
Short-Term Capital Gains (STCG)	Less than 12 months	15%	20%
Long-Term Capital Gains (LTCG)	More than 12 months	10%	12.50%

• Tax-Free Limit: The capital gains up to ₹1.25 lakh per year are tax-free. This is an increase from the previous limit of ₹1 lakh.
• Tax Rate: The gains exceeding ₹1.25 lakh are now taxed at a flat rate of 12.5%. This is an increase from the previous rate of 10%.
• Indexation: The benefit of indexation, which allowed investors to adjust the purchase price for inflation, has been removed for all asset classes, including equity mutual funds.

Debt Mutual Funds

Capital Gains Tax	Holding Period	Old Rate	New Rate
Short-Term Capital Gains (STCG)	Less than 36 months	Taxed according to your income tax slab	Taxed according to your income tax slab
Long-Term Capital Gains (LTCG)	More than 36 months	10%	12.50%

1. Tax Rate: A flat 12.5% tax rate applies to these gains.
2. No Indexation Benefit: The previous benefit of adjusting the purchase price for inflation is removed. Now, the entire gain after three years is taxable at 12.5%.
3. Change in Holding Period for Specified Mutual Funds: Previously, debt mutual funds with a holding period of over 36 months were taxed based on the investor’s tax slab, classified as Long-Term Capital Gains (LTCG). Now, for specified mutual funds where over 65% of the investment is in debt, the holding period for taxation has been reduced to over 24 months. These funds will still be taxed according to the investor’s tax slab as either LTCG or STCG. 

Hybrid Mutual Funds

• Short-Term Capital Gains (STCG): The tax on short-term capital gains depends on the fund’s asset allocation when it comes to hybrid mutual funds. 
• Long-Term Capital Gains (LTCG): The capital gains tax on hybrid mutual funds that extend the specified period (12 or 36 months) is known as the long-term capital gain tax. 

Type of Hybrid  Fund	Short-Term Capital Gains (STCG)	Long-Term Capital Gains (LTCG)	Indexation Benefit
Equity-Oriented Hybrid Funds	20% for holdings less than 1 year	12.5% for holdings over 1 year, with gains up to Rs. 1.25 lakh tax-free	Not available
Debt-Oriented Hybrid Funds	Taxed as per income tax slab for holdings less than 3 years	12.5% for holdings over 3 years	Not available

Note: Mutual fund schemes where neither the equity nor debt orientation exceeds 65% will now be classified as long-term investments after 24 months. The previous holding period for these funds was 36 months. These will be taxed at the revised LTCG tax rate of 12.5%.

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 returns from 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.

To Wrap It Up…

Monthly-income mutual funds offer a balanced way to generate regular income and preserve capital. These plans invest in debt and equity instruments, aiming for stable returns with reduced volatility. Investors should evaluate their risk tolerance and investment goals before adding MIPs.

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Frequently Asked Questions About Monthly Income Mutual Funds