Retired folks and those looking for monthly income can choose from a variety of options. Among these include fixed deposits, MIPs of post office and monthly income plans of mutual funds. Here we have chosen a few balanced and equity mutual funds for the best monthly dividend income plans in India.
Tata Balanced Fund - Regular Plan
Tata Balanced fund is a fund that has given consistently good returns in the last few years. It last declared a dividend of Rs 0.72 in the month of Feb.
The NAV under the dividend plan is Rs 66.36. Tata Balanced Fund has generated a return of almost 16 per cent since its launch in 1995. Those looking at stable monthly income could opt for this balanced fund. The minimum initial investment required is Rs 5,000
One can start an SIP through the fund through small amounts of Rs 500 every month. The fund has exposure to government debt and in the equity segment has exposure to shares of ICICI Bank, HDFC Bank and Reliance Industries among others.
This has to be one of the top mutual funds in the country with assets under management of Rs 39,000 crores. It has a solid record of the best distribution of monthly income. It is a hybrid fund with money parked in both debt and equity.
The fund last declared a dividend of Rs 0.30 per unit. The current NAV under the monthly income plan is Rs 31.17. The one year returns from the fund has been fantastic at 21 per cent. The three year returns are slightly more subdued at 11.31 per cent. You can invest in the scheme through the systematic investment plan, which can help generate monthly income.
Remember that in Union Budget 2018, income from mutual funds have been taxed.
Other details of HDFC Prudence
SIPs in HDFC Prudence can be done with a small sum of Rs 500. The initial amount required is Rs 5,000. The fund has holding in State Bank of India, ICICI Bank, Infosys and Larsen and Toubro among others. The fund also has holdings in debt of State Bank of India and Tata Sons.
The portfolio is solid and also is largely safe. However, an important thing to note is that while the track record of the fund for dividends is excellent, there is no guarantee that the dividends would be certain. It largely depends on the market conditions.
ICICI Prudential Balanced Fund
ICICI Prudential Balanced Fund is another fund that is good for monthly, yearly income and half yearly income. It has a good track record and the portfolio too looks attractive. The dividend plans currently has an NAV of Rs 13.75. This is for the yearly plan and one can also opt for the same.
The fund has a very large asset size of nearly 27,000 crores. Among the top holdings of ICICI Prudential Balanced fund include the likes of ICICI Bank, ITC, NTPC, HDFC and ONGC. The fund also has debt in its holdings including debt from ICICI Bank and government debt. Dividends distributed by the fund is not tax free as mentioned earlier.
L&T India Prudence Fund
This is also a top fund for those looking to earn monthly dividend. The fund last declared a dividend of 0.13 per unit. L&T India Prudence is currently having holdings in some top funds including the likes of HDFC Bank, HDFC etc.
It also has debt holdings in government debt, NABARD, ICICI Bank etc. You can also opt for the yearly dividends under the plan.
Returns and dividends from funds with large exposure to equity, largely depends on the market performance. So, one thing investors should not is that dividends are not certain and depend on market performance. On the other has bank and other fixed deposits, you are assured of returns.
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