7 Best Monthly Income Plans (MIPs) To Consider

Posted By: Staff
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Monthly Income Plans (MIPs) are best for individuals who are looking for steady income. Monthly Income Plans from mutual funds are nothing but debt funds as they invest most of the corpus in debt instruments.

Aggressive MIP funds invest 16%-30% in equity securities and the remaining in debt securities. This can be a bit risky for retirees and ultra-conservative investors as the investment portion is higher in aggressive MIPs.

Here are 7 Best Monthly Income Plans, that can give steady income in 2018:

Birla Sun Life MIP II - Wealth 25 Plan

This is a hybrid debt oriented aggressive fund. Birla Sun Life MIP II - Wealth 25 Plan has generated a return of almost 12.51 per cent in the last one year. Birla Sun Life MIP II - Wealth 25 Plan is among the few funds that has given returns of almost 13.23 per cent in the last five years.

Individuals can start investing in the fund with a small sum of Rs 1000 and then a small sum of Rs 1000, through the Systematic Investment Plan.

Investors can give 6 post dated cheques for investing in the systematic investment plan. This Monthly Income plan is ranked number one by Crisil and five star rating by Value Research Online.

The scheme has allotted 70%-80% in debt and money markets instruments and 20%-30% in equity & equity related instruments. The assets under management is about Rs 2,527 crores.

A good hybrid debt plan to be in.

Franklin India Monthly Income Plan - Plan A

Franklin India Monthly Income Plan fund is a hybrid debt oriented conservative fund. The fund has given an average return of 10.16 per cent in the last 5 years.  The minimum investment amount is Rs 10,000 and one can invest through SIPs of Rs 500 each month.

There is 1 per cent exit load for redemption within 365 days. The NAV under the growth plan is Rs 53.06, while the dividend plan has an NAV of Rs 13.51. 

Individuals can start to invest in the fund with a sum of Rs 1,000 and then a small sum of Rs 500. The portfolio of the fund consist of stocks like HDFC Bank, Axis Bank, State Bank of India and Bharti Airtel. The assets under management are rather small at Rs 435 crores.

ICICI Prudential Regular Income Fund

This is a Hybrid Debt oriented conservative plan. Bulk of the money of the fund is invested in debt oriented securities. The fund also has exposure to shares of Reliance Industries, Larsen and Toubro, TataSteel and Axis Bank.

ICICI Prudential Regular Income Fund has generated a return of 8.58 per cent in the last 5 years. There is a dividend that is payable every quarterly which investors could opt for, and the net asset value of the same is Rs 10.65.

Under the growth option the NAV of the scheme is Rs 17.153. While the returns of the scheme are not very great, investors with a not so great risk appetite can opt for this plan.

HDFC Monthly Income Plan - LTP

This is a hybrid debt oriented aggressive fund. HDFC Monthly Income Plan is ranked two by Crisil.

The fund has given an average return of 9 per cent on an average for the last 3 years. The Fund was launched in 2003 and has given a return of 11.18 per cent since its launch.

Individuals can start to invest in the fund with a sum of Rs 5000 and then a small sum of Rs 500.

There is 1 per cent exit load for redemption within 365 days. The portfolio of the fund consist of stocks like ICICI Bank, L&T, State Bank of India, Infosys etc.  There is also a heavy exposure to government of India securities and bonds.

ICICI Prudential MIP 25

The Fund was launched in 2004 and has given a return of 10.55 per cent since its launch. Individuals can start to invest in the fund with a sum of Rs 5,000.

The last three-year returns of the fund has been close to 10.88 per cent. The portfolio of the fund consist of stocks like Motherson Sumi, Maruti Suzuki, HDFC Bank, TVS Motors. The fund also has exposure to 7.61% GOI 2030 and 7.88 per cent government of India security.

UTI MIS Advantage Plan

The MIP has given a return of 10.20 per cent since its launch way back in 2003. Individuals can start to invest in the fund with a sum of Rs 5,000.

The last three-year returns of the fund has been close to 9.48 per cent. The portfolio of the fund consist of stocks like Bajaj Finance, Indusind Bank, Yes Bank and Infosys. The fund is bench marked against the Crisil MIP Blended and falls under the category Debt-Oriented Conservative.

The fund also has exposure to government of India securities and also 8.39% Rajasthan State 2020. 

Reliance Monthly Income Plan

Reliance Monthly Income Plan is ranked number three by Crisil and star-three rating by Value Research Online. The fund is bench marked against the Crisil MIP Blended and falls under the category Debt-Oriented Conservative.

The MIP has given a return of 10.59 per cent since its launch. Individuals can start to invest in the fund with a sum of Rs 5,000.

The last three year returns of the fund has been close to 8.19 per cent. The portfolio of the fund consist of stocks like HDFC Bank, and Infosys. The fund also has debt exposure including the likes of 8.17 per cent Government of India 2044. 

What are MIPs?

MIP stands for Monthly Income Plan, which where an investor can get good returns and is an alternative to the fixed deposits and post office Monthly Income Scheme(MIS). These mutual funds provide monthly income by way of a sum of money regularly paid by a company to its shareholders out of its profits based on the performance of the Mutual Fund. These MIP dividend mutual funds provide higher returns compared to bank fixed deposits and post office MIS scheme. There are many good MIPs available in the market, which we have highlighted above. Choosing any scheme depends on the investors own objectives.

Taxation on MIPs

MIPs are more tax efficient than bank deposits. These are debt oriented mutual fund schemes and are hence governed by the mutual fund taxation principles. For example, dividends are tax free in the hands of the investors. On the other hand any profit made by the investor through sale before one year is treated as Short-Term Capital Gain and is taxed in the same income-tax slab to which the investor belongs. One has to be careful on the taxation before investing in the same.

Now in the case of MIPs what is important to note is the fact that you should consider the best option for you. If you believe that you need to be a little risk averse you would do well to chose the MIPs, where there is no or very little. This is true especially if you have retired and safety is of paramount importance to you. We have tried and selected the best possible Monthly Income Plans. However, we wish to state that investments in these are pretty dynamic, in the sense you may want to monitor your portfolio more frequently then you do otherwise.

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