Monthly Income Scheme or Monthly Income Plan is an investment option where the investors receive a certain sum of return every month. This return is generally received after having invested for a few years.
Normally the Monthly Income Plans from Mutual Funds invest majorly (more than 65% of the assets) in the debt instruments or fixed income yielding instruments. However, some aggressive Monthly Income Schemes invest up to 30% in the equity securities and the remaining in debt securities making them a bit riskier for retirees and conservative investors as aggressive MIPs involve higher investment portion.
If you would like to invest in a monthly income scheme, it is recommended that you go through a list of best monthly income plans offered by different Asset Management Companies.
HDFC Hybrid Debt Fund
This hybrid debt oriented aggressive fund is one of the top Monthly Income Plan in the market.
With an average return of 9.76% for the last 5 years, the fund has given 10.44% average return since its inception in 2003.
Individuals can start investing in HDFC Hybrid Debt Fund with a minimum amount of Rs. 5000 as a lump sum or Rs. 500 as SIP.
With stocks like ICICI Bank, L&T, SBI, Infosys, etc. and heavy exposure to Government of India securities and bonds, HDFC Hybrid Debt Fund is currently managing assets worth Rs. 3,179 crores.
UTI Regular Savings Fund-Regular Plan
Since its launch in 2003, this MIP from Unit Trust of India has given a return of 9.72%. You can choose to invest in this scheme with as low as Rs. 500 as SIP or Rs. 5000 in a lump sum.
The last 5-year returns from the fund have been close to 10.18% whereas the 3-year average return has been 8.44%.
This Monthly Income Scheme falls under the category of Debt-Oriented Conservative and is exposed to Government of India securities along with stocks of Bajaj Finance, IndusInd Bank, Yes Bank, and Infosys.
Aditya Birla Sun Life Regular Savings Fund
Another hybrid debt oriented aggressive fund in the list of best monthly income schemes is Aditya Birla Sun Life Regular Savings Fund which has generated a return of 10.99% in the last 5 years with an average of 9.55% returns since inception.
Investing in this scheme is more convenient than others as the minimum amount to invest is Rs. 500 in lump sum or SIP. The assets under management for this fund are worth Rs. 2,331 crores which comprise of 70%-80% debt and money market instruments and remaining 20%-30% equity and equity related instruments.
Reliance Hybrid Bond Fund
Reliance Hybrid Bond Fund is exposed to the likes of 8.17% Government of India 2044 in the debt sector making it a decent choice for an individual to invest in a monthly income plan.
The last 5-year average return from this monthly income scheme is 9.84% and the minimum investment amount is Rs. 5000 in lump sum and Rs. 500 as SIP.
ICICI Prudential Regular Savings Fund
Launched in 2004, ICICI Prudential Regular Savings Fund has given a return of 10.12% since then. This fund invests in stocks like Motherson Sumi, Maruti Suzuki, HDFC Bank, TVS Motors, and debt instruments like 7.61% Government of India 2030 and 7.88% Government of India security with last five-year returns were close to 11.44%.
Monthly Income Schemes are best for those investors who are looking to exploit equity markets with moderate risk and earn a fixed income every month from the investment. Such schemes don’t just provide monthly income; they also generate market-linked returns. It is also a good option for the people who are near retirement and would like to enjoy some monthly income as part of their after-retirement life.
There are many good Monthly Income Plans available in the market, but the best of them in the present times are mentioned above. However, as an investor, you do not have limited choice and your choice must depend on your objectives and expectations.
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