How Do Monthly Income Mutual Funds Work

Monthly income plans mip mutual funds are debt funds which invests 5 to 30 in equity and balance in debt related instruments.

How do monthly income mutual funds work. An mip is a debt mutual fund scheme which invests a small part of the funds 15 25 pe. Among these include fixed deposits mips of post office and monthly income plans of mutual funds. Therefore it is typically attractive to retired persons or senior citizens without other substantial sources of monthly income. These mip plans provide regular dividend payouts either by monthly quarterly or half yearly.

During the start of the next month if the nav of your scheme increases to rs 20 then the withdrawal of rs 5 000 would mean selling 250 units which is rs 5 000 20. The ratio of equity investments is considerably low but is just enough to give you an added advantage to the stability of the debt part of the fund. Fund managers can choose to reinvest the profits or distribute them to their investors depending on. A mutual fund earns dividends and interest from the various investments held in its portfolio.

Is it possible to get such income with 20 lakh rupees. The remaining amount in your mutual fund post this withdrawal will be 7 500 units 8 000 500. I am expecting income of rs 18 000 per month. A monthly income plan mip is a type of mutual fund scheme that invests in debt and equity securities.

Mips are funds aimed at conservative investors who want a regular monthly income. While there are mutual funds which have consistently paid out monthly dividends it is not assured that such funds would continue to declare a high dividend amount. The mutual fund would be left with 7 250 units post this withdrawal 7 500 250. An mip aims to provide a steady stream of income in the form of dividend payments.

I want to invest rs 20 lakh in mutual funds for a monthly income. Monthly income plans known as mips are debt oriented hybrid mutual funds that give a fixed return every month to the investor. Best international global mutual funds to invest in india here are some of the key features of mip mutual funds. Retired folks and those looking for monthly income can choose from a variety of options.

If there is a phase where. Monthly income plans invest in equity as well as debt. A bank mis is like a bank fixed deposit where interest earned is paid at regular intervals. However the equity component of this kind of fund is very small only about 20 30 percent.

The interest rates are the same as the prevalent fixed deposit rates.