List of Top Monthly Income Mutual Funds (2026)

Monthly Income Mutual Funds are hybrid schemes that invest primarily in debt instruments with a smaller equity allocation, aiming to balance relatively stable income with modest growth potential. Popular among income-oriented investors in India, these funds manage a sizable asset base across categories. That said, the name can be misleading: payouts are not guaranteed, as distributions depend entirely on scheme performance and the availability of distributable surplus. This article covers how monthly income mutual funds work, what to look for when choosing one, and the key risks to keep in mind.

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 14th May 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 is a conservative hybrid scheme that invests 75–90% in debt and money market instruments, with the balance in equities. It seeks regular income as its primary objective, with long-term capital appreciation as a secondary goal, positioned as a credible alternative to fixed deposits.

ICICI Prudential Regular Savings Fund

ICICI Pru Regular Savings Fund is a conservative hybrid fund that predominantly invests in high-quality debt and money market instruments, with a modest equity allocation to enhance returns. It aims to provide regular income while targeting long-term capital appreciation for investors with a 3-year-plus horizon.

SBI Conservative Hybrid Fund

SBI Conservative Hybrid Fund is an open-ended conservative hybrid scheme that primarily invests in debt and money market instruments, with a secondary allocation to equity. It aims to provide a steady income and capital preservation with limited equity-driven growth potential.

HSBC Conservative Hybrid Fund

HSBC Conservative Hybrid Fund seeks to generate reasonable returns primarily through debt and money market investments, with a secondary objective of capital appreciation through selective equity exposure. It follows a disciplined, fundamental research-driven approach to both debt and equity allocation.

DSP Regular Savings Fund

DSP Regular Savings Fund is a conservative hybrid scheme that seeks consistent, prudent returns from a portfolio substantially comprising high-quality debt securities. The smaller equity component, diversified across sectors and market caps, aims to provide an additional boost to returns.

Kotak Debt Hybrid Fund

Kotak Debt Hybrid Fund is an open-ended conservative hybrid scheme that aims to enhance returns over a core portfolio of debt instruments with moderate equity exposure. It invests in high-credit, shorter-duration debt to reduce interest rate risk while using equity to boost overall returns.

Aditya Birla SL Regular Savings Fund

Aditya Birla SL Regular Savings Fund seeks to provide high liquidity and safety with reasonable returns through investments in debt and money market instruments, with a modest equity allocation of around 20% to generate additional capital appreciation.

Aditya Birla SL Regular Savings Fund (Payment)

Aditya Birla SL Regular Savings Fund (Payment) is the income distribution variant of the Aditya Birla SL Regular Savings Fund, offering the same predominantly debt-oriented portfolio with periodic income payouts, suited for investors seeking regular cash flows alongside modest equity participation.

Baroda BNP Paribas Conservative Hybrid Fund

Baroda BNP Paribas Conservative Hybrid Fund primarily targets regular returns through debt and money market instruments, with a secondary allocation to equity for long-term capital appreciation. It offers a conservative, lower-risk approach suited for investors prioritising income stability over growth.

Nippon India Conservative Hybrid Fund

Nippon India Conservative Hybrid Fund is a conservative hybrid scheme investing predominantly in debt and fixed income securities, with a limited equity allocation. It seeks to deliver stable income and moderate capital appreciation while maintaining a low-risk profile for conservative investors.

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 fixed monthly income 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 fixed 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.

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

An SWP is considered one of the best monthly income mutual fund schemes 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 mutual fund schemes, 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 India 

• Investment in Debt Instruments: MIP mutual funds put 70% to 80% of their portfolio into debt instruments — bonds, debentures, and money market instruments — and invest the rest in equities. Investors can pick between Dividend and Growth options. The Dividend option pays out returns periodically, while Growth puts them back into the fund to raise the NAV.
• Dependence on Market Conditions: Monthly income mutual funds don’t promise fixed returns. Dividends depend on the fund’s surplus and NAV performance, so the income you get will go up and down with market conditions and fund results.
• Low to Moderate Risk: These plans work for investors who can handle low to moderate risk and plan to stay invested over a medium to long period. Returns usually land somewhere between what fixed deposits and pure equity funds offer.

Benefits of Investing in Monthly Income Mutual Funds India

• Steady Income Streams: Monthly income mutual funds aim to generate regular income through lower-risk investments. If you need a consistent cash flow, these funds can give you dependable monthly distributions.
• Tailored to Retirement Needs: MIPs work well for retirees who need regular cash flow. Many retirement portfolios include them as a practical, income-generating component.
• Diverse Equity Exposure: These funds come with varying levels of equity exposure, so investors can build portfolios that match their risk tolerance and financial goals.
• Professional Management: MIPs give you access to professional fund managers who handle asset allocation and respond to market shifts. That said, professional management doesn’t remove investment risk entirely.

Risks Involved While Investing in Monthly Income Mutual Funds

• Fiscal Implications and Exit Challenges: Some MIPs have lock-in periods and charge exit loads if you withdraw early. Since they invest mainly in debt, the tax treatment follows that of fixed-income funds.
• Volatility: Stock and bond market swings affect MIP values. Even income-focused funds go through volatile patches.
• Interest Rate Impact: When interest rates rise, the value of debt instruments typically falls. Since debt makes up the bulk of MIP portfolios, this hits returns directly.
• Credit Risk: Debt security issuers can default on payments, and that can lead to losses for investors.
• Inflation Risk: If inflation climbs faster than MIP returns, the real purchasing power of your investment drops over time.

Factors to Consider Before Investing in Monthly Income Mutual Funds  

• Define Financial Goals: Your financial goals and risk tolerance should drive which MIP you choose. Think about how much monthly income you actually need and whether the fund’s structure fits that.
• Performance Analysis: Check how the fund has performed across different market conditions. Past dividend payment patterns — especially how they held up during downturns — give useful context, though they don’t predict future results.
• Fees and Expenses: Expense ratios and other charges eat into net returns. Funds with lower fees keep more money working for you over time.
• Manager’s Strategy: Look into how the fund manager approaches investment decisions. Different managers balance debt and equity allocations differently, and that approach should match what you expect.

Who Should Invest in a Monthly Income Plan?

• Investors Seeking Regular Cash Flow: MIPs suit people who want consistent monthly payouts rather than a lump sum. Retirees stepping away from a salary, parents covering education costs, or anyone with recurring expenses often lean toward these plans for their distribution structure.
• Those with Lower Risk Appetite: The 75–90% debt allocation means MIPs usually see less volatility than pure equity funds. Investors who want to preserve capital while aiming for modest growth often find this balance a good fit.
• Medium-Term Investment Horizon: MIPs generally work better when you hold them for 3–5 years or longer. That gives the debt component time to stabilise and the equity portion room to grow. If you might need full access to your money sooner, weigh that against your liquidity needs before investing.

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