15 Best Monthly Income Scheme in India 2023
What is a Monthly Income Scheme?
Monthly Income Schemes (MIS) or Monthly Income Plans, are usually debt-oriented funds (with about 80% of the fund being invested in debt funds), with exposure to stock options. The goal is to earn steady monthly returns, preserve investments, and capitalise wherever possible through equity exposure.
Read on to know about the best Monthly Income Schemes in India where you can invest in 2023.
15 Best Monthly Income Scheme to Invest in 2023 – Top Plans
The following are the best investment plans for monthly income available in the market this year:
| S. No. | Fund | Features |
| 1. | HDFC Hybrid Debt Fund | NAV: ₹65.93 AUM: ₹2,751.35 crore Expense Ratio: 1.35% |
| 2. | ICICI Prudential Regular Savings Fund | NAV: ₹62.66 AUM: ₹3,291.28 crore Expense Ratio: 0.99% |
| 3. | Nippon India Hybrid Bond Fund | NAV: ₹50.05 AUM: ₹721.81 crore Expense Ratio: 1.26% |
| 4. | UTI Regular Savings Fund | NAV: ₹56.86 AUM: ₹1,575.17 crore Expense Ratio: 1.2% |
| 5. | UTI Treasury Advantage Fund | NAV: ₹3,008.57 AUM: ₹3,008.98 crore Expense Ratio: 0.33% |
| 6. | Canara Robeco Monthly Income Plan | NAV: ₹51.49 AUM: ₹125.94 crore Expense Ratio: 0.75% |
| 7. | DSP Regular Savings Fund | NAV: ₹45.38 AUM: ₹4,007.48 crore Expense Ratio: 0.26% |
| 8. | SBI Multi Asset Allocation Fund | NAV: ₹42.16 AUM: ₹600.6 crore Expense Ratio: 0.88% |
| 9. | Kotak Debt Hybrid Fund | NAV: ₹49.76 AUM: ₹1,637.43 crore Expense Ratio: 0.44% |
| 10. | Sundaram Debt Oriented Hybrid Fund | NAV: ₹26.09 AUM: ₹30.74 crore Expense Ratio: 1.2% |
Also Read
Best Performing Monthly Income Scheme in India 2023 – Detailed Overview
1. HDFC Hybrid Debt Fund
CRISIL ranks HDFC Hybrid Debt Funds as fourth. This scheme was launched on December 26, 2003. It aims to generate higher returns by majorly investing in money market instruments, debt securities, and sometimes in equities. Shobhit Mehrotra and Srinivasan Ramamurty are the fund managers of this scheme.
- NAV: ₹65.93
- AUM: ₹2,751.35 crore
- Expense Ratio: 1.35%
- Risk: Moderately high risk
- Minimum investment: ₹100
- Type of Funds: Conservative hybrid fund
- Returns:
- Annualised 1-year Returns: 6.00%
- Annualised 3-year Returns: 9.80%
- Annualised 5-year Returns: 7.60%
2. ICICI Prudential Regular Savings Fund
This scheme was incorporated on March 30, 2004. This scheme aims to generate higher returns by mostly investing in debt and money market funds. It also aims to generate long-term capital gains by investing in equities that they manage. Manish Banthia, Roshan Chutkey, and Sharmila D’mello are the fund managers who manage this scheme.
- NAV: ₹62.66
- AUM: ₹3,291.28 crore
- Expense Ratio: 0.99%
- Risk: Moderately high
- Minimum investment: ₹100
- Type of Funds: Conservative hybrid fund
- Returns:
- Annualised 1-year Returns: 5.28%
- Annualised 3-year Returns: 8.19%
- Annualised 5-year Returns: 8.74%
3. Nippon India Hybrid Bond Fund
Crisil has ranked this scheme with 2 stars due to its below-average returns. It was incorporated for investors on December 29, 2003. As an open-ended fund, you can invest here at your convenience. If you sell these funds before 1 year, you have to pay a 1% exit load. Dhrumil Shah, Kinjal Desai, Akshay Sharma and Sushil Budhia are the fund managers overlooking this scheme.
- NAV: ₹50.55
- AUM: ₹721.81 crore
- Expense Ratio: 1.26%
- Risk: High risky
- Minimum investment: ₹100
- Type of Funds: Conservative hybrid fund
- Returns:
- Annualised 1-year Returns: 5.28%
- Annualised 3-year Returns: 3.82%
- Annualised 5-year Returns: 3.00%
4. UTI Regular Savings Fund
UTI Regular Savings Fund scheme was launched on December 16, 2003. This scheme allocates 24.58% of its assets in equities and 72.73% in debt assets. This fund also levies a 1% exit load if you redeem the funds within 365 days. Amandeep S. Chopra and Amit Prem Chandanani are the fund managers maintaining this scheme.
- NAV: ₹56.86
- AUM: ₹1,575.17 crore
- Expense Ratio: 1.20%
- Risk: Moderately High
- Minimum investment: ₹500
- Type of Funds: Conservative hybrid fund
- Returns:
- Annualised 1-year Returns: 3.95%
- Annualised 3-year Returns: 9.87%
- Annualised 5-year Returns: 6.91%
5. UTI Treasury Advantage Fund
UTI Mutual Fund incorporated this scheme on November 14, 2002. It focuses on generating income and high liquidity by investing in debt and money market instruments. It has 85.8% of asset allocation in debt and 14.2% in cash. Furthermore, this scheme has no exit load for redeeming funds. Anurag Mittal is the present fund manager of the UTI MIS Advantage Plan.
- NAV: ₹3,008.57
- AUM: ₹3,008.98 crore
- Expense Ratio: 0.33%
- Risk: Low to moderate
- Minimum investment: ₹500
- Type of Funds: Low duration fund
- Returns:
- Annualised 1-year Returns: 4.8%
- Annualised 3-year Returns: 7.0%
- Annualised 5-year Returns: 4.8%
6. Canara Robeco Monthly Income Plan
Canara Robeco Monthly Income Plan was launched on September 19, 2002, and it invests in medium to long-term debt securities. This fund invests 92.88% in debt securities and the rest in cash equivalents. Of the debt allocation, 80.83% is in government securities, and 12.05% is in other low-risk securities. Avnish Jain and Kunal Jain are the fund managers of this scheme.
- NAV: ₹51.49
- AUM: ₹125.94 crore
- Expense Ratio: 0.75%
- Risk: Moderate
- Minimum investment: ₹1,000
- Type of Funds: Medium to long duration funds
- Returns:
- Annualised 1-year Returns: 3.74%
- Annualised 3-year Returns: 5.49%
- Annualised 5-year Returns: 6.90%
7. DSP Regular Savings Fund
This scheme was launched by DSP Mutual Fund on 30 September 1999. As an open-ended fund, you can invest here at your convenient time. This scheme seeks to generate capital gains by investing in Treasury bills and other Central Government Securities with a maturity not exceeding 1 year.
- NAV: ₹45.38
- AUM: ₹4,007.48 crore
- Expense Ratio: 0.26%
- Risk: Moderate
- Minimum investment: ₹500
- Type of Funds: Money market fund
- Returns:
- Annualised 1-year Returns: 4.47%
- Annualised 3-year Returns: 4.69%
- Annualised 5-year Returns: 5.92%
8. SBI Multi Asset Allocation Fund
This fund was launched on December 21, 2005. The fund managers managing this scheme are Dinesh Balachandran, Raj Gandhi and Mohit Jain. It is a multi-asset fund that invests across asset classes. This fund allocates 50.31% of its investment in equities out of which 19.91% is in large cap funds 14.34% in small stock funds and 5.94% in mid cap funds.
- NAV: ₹42.16
- AUM: ₹600.6 crore
- Expense Ratio: 0.88%
- Risk: Very high
- Minimum investment: ₹500
- Type of Funds: Multi asset fund
- Returns:
- Annualised 1-year Returns: 6.44%
- Annualised 3-year Returns: 10.67%
- Annualised 5-year Returns: 9.36%
9. Kotak Debt Hybrid Fund
This scheme was launched on December 2, 2003. This scheme aims to generate returns mainly from a debt portfolio while maintaining a moderate exposure to equities. It charges a 1.0% exit load if securities are sold within 180 days. Abhishek Bisen, Devender Singhal and Vihag Mishra are the fund managers managing this scheme.
- NAV: ₹49.76
- AUM: ₹1,637.43 crore
- Expense Ratio: 0.44%
- Risk: Moderately high risk
- Minimum investment: ₹1,000
- Type of Funds: Conservative hybrid fund
- Returns:
- Annualised 1-year Returns: 5.43%
- Annualised 3-year Returns: 11.34%
- Annualised 5-year Returns: 9.58%
10. Sundaram Debt Oriented Hybrid Fund
This scheme was launched on January 25, 2010. Dwijendra Srivastava, S. Bharat, Ashish Agarwal, and Sandeep Agarwal are the fund managers who manage this scheme. This fund focuses on increasing one’s capital growth by investing in fixed-income securities along with equity and equity-related instruments.
- NAV: ₹26.09
- AUM: ₹30.74 crores
- Expense Ratio: 1.2%
- Risk: Moderate
- Minimum investment: ₹250
- Type of Funds: Conservative hybrid fund
- Returns:
- Annualised 1-year Returns: 3.87%
- Annualised 3-year Returns: 8.47%
- Annualised 5-year Returns: 5.74%
Types of Monthly Income Scheme
There are two broad types of Monthly Income Plans:
- Growth Oriented Monthly Income Plans: The accumulated earnings on the investment get reinvested in the fund, enabling wealth creation. Extremely similar to Dividend Reinvestment Plans (DRIPs).
- Dividend–Oriented Monthly Investment Plans: The plans which pay-out regular dividends to its subscribers. Unless otherwise mentioned, most monthly income plans are dividend-oriented.
Benefits of Monthly Income Scheme
Monthly Income Plans have the following benefits that you can enjoy.
- No Limit: Unlike other instruments that generate regular monthly returns at a healthy rate (for example, Government Savings Schemes), MIPs don’t have a maximum limit on how much money a person can invest.
- Open Ended: Monthly Investment Plans are usually open-ended schemes, where individual investors don’t have to pay an “entry load” for being a part of the scheme. It allows the investors the flexibility to opt-out of the plan at any time, without a significant exit load (other instruments like Fixed Deposits and annuity have a minimum lock-in period).
- Liquidity: Monthly Income schemes are comparatively more liquid than most savings schemes. No lock-in period is applicable, as investors can choose to withdraw their money at any time. There might be a small exit load charged if the capital is withdrawn within a few days of the original purchase.
- Returns: The returns generated through Monthly Income Plans are comparatively more lucrative than other instruments like Fixed deposits and savings schemes. This is amplified by the regular payouts that these mutual funds tend to give making it a perfect vehicle for people with a conservative risk appetite.
- Low to Moderate Risk: Most monthly income plans come with a relatively low/moderate risk profile and is best suited for people who are risk-averse.
- Professionally Managed: Monthly Income Plans are one of the front runners for many AMCs, and often have their best funds managers working on them. These experts understand the requirements, and the mindset of the investors looking to invest in a Monthly income scheme, and decide exactly which instruments they’d invest in.
Who Should Invest in Monthly Income Plans?
MIPs are primarily targeted at retirees who don’t want to eat away at their retirement fund through constant withdrawals. These are the best investment plans for monthly income that will allow retirees to earn a healthy, regular return on their corpus, all the while protecting the initial investment. These schemes offer retirees a source of income every month, helping them sustain their lifestyle, all the while having the rest of the funds for any emergencies.
MIPs are not strictly only for retirees though, as the benefits and risk profile is highly suitable for any conservative investor looking to earn a decent return over a short period of time.
How to Invest in Monthly Income Scheme?
Here is how you can invest in a Monthly Income Scheme.
- First, identify your risk appetite and divide your investment sum to different asset classes.
- Visit the respective mutual fund’s website and fill up the application form to invest in your preferred investment.
- You can also visit their branch office or Investor Service Centre to submit the duly filled application form physically.
- You may invest in a Monthly Income Scheme through a financial intermediary or invest directly.
Factors to Consider Before Investing in Monthly Income Plan
When investing in a monthly income plan, here are some of the things that you should consider.
- Short-term/long-term financial goals: If your goal is to retire, or generate wealth significantly, consider other avenues of investment. However, if you’re looking for a low-moderate risk investment that generates regular returns, MIPs are the best investment plans for monthly income.
- Associated cost: Monthly Income Plans tend to be on the expensive side. Consider the associated costs of the different funds, and see what suits you the best.
- Returns: Even though they are “Monthly Investment Schemes”, these plans do not guarantee monthly returns. In the months when the funds perform poorly, there might not be any dividend declared.
- Risks: In fact, the Securities and Exchange Board of India (SEBI), prohibits AMCs from guaranteeing a monthly return. Be on the lookout for fraudulent policies that look to prey on the under-informed.
- AMCs & Fund Managers: The reputation of the Asset Management Company and the fund managers should also be scrutinized properly before making the investment. Monthly Income Plans are extremely popular in India, and there are many malicious actors looking to exploit the popularity of these plans.
Taxation of Monthly Income Plans
Monthly Income Schemes are taxed just like other non-equity oriented mutual funds. Any gains made from the disposal of the investment (through selling or otherwise), before a period of 36 months from the date of initial investment – the entire amount of gain will be taxed according to your tax bracket. However, if done after a period of 36 months, only Long Term Capital Funds would be attracted, at the rate of 20% with indexation benefits.
The dividends received monthly from the AMC, on the other hand, are tax-free at the hand of the investors. The AMC is subject to pay a 25% dividend distribution tax though, and that might add to the cost of maintaining the mutual funds.
Final Word
If you’ve retired from your 9-5, and are in the “preserve capital” at all costs mindset, these best Monthly Income Schemes are made just for you. However, if you’re looking to exponentially generate wealth in the long run, low-cost index funds like the one on offer at Navi might be more suitable for you. Start investing with Navi Mutual Funds.
FAQs
Ans: There are a number of investment schemes that are suitable for monthly income. This includes Post Office Monthly Income Schemes, government bonds, Senior Citizen Savings Certificate and monthly income plans. Each comes with different risks and rate of returns, so the best investment will depend on the investor’s needs.
Ans: Here is a list of 5 best banks with the highest interest rates in India on a monthly basis:
1. IDBI Bank (5.4%)
2. HDFC Bank (5.5%)
3. Punjab National Bank (5.25%)
4. Kotak Bank (5.3%)
5. IDFC Bank (5.75%)
Ans: Post Office Monthly Income scheme is a collection of several government-backed investment schemes that offer fixed returns. Since they come with a sovereign guarantee, these schemes are comparatively safer than most equity shares or other fixed-income options.
Ans: You can invest ₹15 lakh in a monthly income scheme such as ULIPs, mutual funds, pension plans, FDs and child plans.
Ans: To invest your ₹40 lakh, you can opt for lump sum mutual funds, annuity plans, ULIPs, and fixed deposits.
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
