List of Top Monthly Income Mutual Funds – Meaning, Benefits & Risks
Monthly Income Mutual Funds are hybrid schemes that invest mainly in debt instruments and a smaller portion in equities to offer regular income with moderate growth potential. As of August 2025, monthly income investment plans in India manage an AUM of over ₹85,000 cr across categories. Despite the name, these funds do not ensure fixed monthly payouts because their distributions depend on fund performance and available 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
Mirae Asset NYSE FANG+ETF FoF
Mirae Asset NYSE FANG+ ETF FoF invests in the Mirae Asset NYSE FANG+ ETF, providing exposure to global technology giants like Apple, Amazon, and Meta. It offers Indian investors access to the world’s most innovative tech-driven companies with long-term growth potential.
DSP World Gold Mining Overseas Equity Omni FoF
DSP World Gold Mining Overseas Equity Omni FoF invests in global gold mining companies through international funds. It aims to benefit from movements in gold prices while offering portfolio diversification against inflation and market volatility.
Axis Silver FoF
Axis Silver FoF invests in units of Axis Silver ETF, offering exposure to silver as a commodity. It suits investors seeking diversification through precious metals and a hedge against currency or equity market fluctuations.
Aditya Birla SL Silver ETF FOF
Aditya Birla SL Silver ETF FOF invests in the Aditya Birla Sun Life Silver ETF, tracking domestic silver prices. It provides an easy way for investors to gain exposure to silver without dealing with physical storage.
Nippon India Silver ETF FOF
Nippon India Silver ETF FOF mirrors the performance of Nippon India Silver ETF, which tracks silver prices. It serves as a convenient option for investors looking to diversify into commodities for inflation protection and long-term wealth preservation.
ICICI Pru Silver ETF FOF
ICICI Prudential Silver ETF FOF invests primarily in the ICICI Prudential Silver ETF, giving investors access to the silver market. It provides a cost-effective, paperless way to participate in the potential appreciation of silver prices.
Mirae Asset Global X Artificial Intelligence & Technology ETF FoF
Mirae Asset Global X Artificial Intelligence & Technology ETF FoF offers exposure to the Global X AI & Technology ETF, investing in global leaders in AI, robotics, and automation. It helps investors participate in the global digital transformation trend.
Edelweiss Gold and Silver ETF FoF
Edelweiss Gold and Silver ETF FoF combines exposure to both gold and silver ETFs for balanced precious metal diversification. It aims to hedge inflation and currency risks while providing long-term portfolio stability.
Nippon India Taiwan Equity Fund
Nippon India Taiwan Equity Fund invests in high-growth Taiwanese companies, particularly in the semiconductor and electronics sectors. It allows Indian investors to participate in Taiwan’s globally competitive technology manufacturing industry.
Edelweiss US Technology Equity FOF
Edelweiss US Technology Equity FoF invests in leading U.S. technology companies through global ETFs. It offers Indian investors access to innovation-driven firms like Microsoft, Alphabet, and NVIDIA, targeting long-term capital appreciation through exposure to the U.S. tech sector.
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:
| Type of Fund | Holding Period | Capital Gains Type | Tax Rate |
| Equity-Oriented Monthly Income Funds | Less than 12 months | Short-Term Capital Gains (STCG) | 15% |
| Equity-Oriented Monthly Income Funds | 12 months or more | Long-Term Capital Gains (LTCG) | 10% on gains exceeding ₹1 lakh (without indexation) |
| Debt-Oriented Monthly Income Funds (Fixed Income Mutual Funds) | Any duration | Taxed as per the investor’s income slab (no indexation benefit) | As per the applicable slab rate |
| Dividend / Monthly Payouts | Applicable to all holding periods | Taxed as “Income from Other Sources” | As per the investor’s income tax slab |
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.
However, if you’re confused about which stocks to pick, you can explore smallcases:
- smallcases are readymade model portfolios of stocks/ETFs, that are based on a theme idea or strategy
- They’re created and managed by SEBI-registered investment experts (also known as smallcase managers)
- smallcase offers over 500+ stock portfolios, created by 200+ managers
Here are a few popular smallcases among new investors:
Disclosures for aforementioned smallcases
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 generate 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 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 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.
| 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 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 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 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 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 mutual funds 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.
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
Monthly income mutual funds invest in debt and equity securities to generate cash flows and preserve capital. Investors can also opt for a systematic withdrawal plan (SWP) to generate monthly income.
Returns from monthly income mutual funds or fixed income mutual funds depend on market conditions and asset allocation. These monthly return investment plans aim to offer a steady income through interest or dividends. However, returns may fluctuate, and past performance doesn’t guarantee future results.
Investing in monthly income mutual funds is ideal for those seeking regular monthly income while maintaining moderate risk. These fixed income mutual funds are suitable for pensioners, retirees, or conservative investors aiming for financial stability and predictable cash flow over the long term.
Investors can receive monthly income in mutual funds through a Systematic Withdrawal Plan (SWP). This allows regular, scheduled withdrawals from a fund, effectively turning mutual fund investments into a monthly return investment plan for consistent cash flow.
Here is a list of the top monthly income funds, sorted according to their 5Y CAGR:
– ICICI Pru Infrastructure Fund
– SBI Magnum Children’s Benefit Fund-Investment Plan
– ICICI Pru Bharat 22 FOF
– HDFC Infrastructure Fund
– Aditya Birla SL PSU Equity Fund
Note: The data for this list was collected on 15th October, 2025.
