- A monthly income plan (MIP) is a type of mutual fund that aims to provide consistent income from dividends and interest payments.
- Fixed-income instruments, preferred shares, and dividend stocks are some of the lower-risk securities that a MIP will invest in.
- MIPs, which are particularly popular in India, are best suited for retirees who want a steady income rather than capital gains.
What is HDFC Monthly income plan?
Every mutual fund will have at least one drawback. The following flaws can be found in MIPs:
- Dividend payments aren’t set in stone. This is due to the equity market’s high volatility. If the economy’s interest rates vary, the returns from the debt part will shift as well. The debt sector performs well when interest rates are low, but when interest rates rise, the fund performs poorly.
- MIP payments are contingent on the fund’s performance and the availability of excess cash in the investment portfolio. If the market is volatile, there will be less cash available, resulting in lower or neglectful payouts. The original investment amount is kept intact and used for future reinvestments.
- Dividends, on the other hand, are subject to an extra tax that must be paid by the Asset Management Company (AMC). A Dividend Distribution Tax (DDT) of 15% must be paid on amounts less than Rs. 10 lakh, and a 10% tax must be paid by the receiving people on amounts greater than Rs. 10 lakh. Dividends are paid out after taxes have been deducted, lowering your overall income.
- If the units are redeemed before the 12-month period has passed, many MIP funds incur a 1% exit load.
MIPs are a viable investment option only if you want to protect your money while still earning a consistent income. Franklin India MIP, UTI MIS – Advantage Plan, Birla SL MIP II-Wealth 25 and Reliance MIP are among the best-rated aggressive MIPs in India, while Birla SL Monthly Income, ICICI Prudential Regular Income, and SBI Magnum MIP are among the best-rated cautious MIPs.
Top 5 Monthly Income Plans to Consider for 2022
To invest in the Birla Sun Life MIP II Wealth 25 Plan, you will need a minimum of Rs.1000. SIP investing in this fund would also demand a payment of Rs.1000. Investors can participate in the SIP by submitting six post-dated checks. The plan invests 70% to 80% of its funds in money market and debt securities, with the remaining 20% to 30% in equity and equity-related instruments. Birla Sun Life MIP II – Wealth 25 Plan’s AUM (Assets Under Management) is Rs.2,492 crores.
This is a conservative debt-oriented fund that is well-balanced. Investors must invest a minimum of Rs.10,000 in this fund, with SIPs requiring a minimum of Rs.500 per month. An exit load of 1% will be applied if the plan is redeemed within a year of purchase. The State Bank of India, HDFC Bank, and Axis Bank are among the equities in the Franklin India Monthly Income Plan – Plan A portfolio. Franklin India Monthly Income Plan – Plan A’s AUM (Assets Under Management) is Rs.412 crore.
The HDFC Monthly Income Plan LTP is a debt-oriented, aggressively managed vehicle. Investors can invest in this fund with a minimum of Rs.5,000 and a maximum of Rs.500. If the fund is redeemed within a year of its initial investment, an exit load of 1% will be applied. Infosys, L&T, ICICI Bank, and the State Bank of India are among the equities in the HDFC Monthly Income Plan LTP portfolio.
The ICICI Prudential Regular Income Fund is a well-balanced, cautious debt-oriented vehicle. The majority of this fund’s assets are invested in debt-oriented securities. Axis Bank, Larsen and Toubro, Reliance Industries, and Tata Steel are among the companies in which the ICICI Prudential Regular Income Fund invests. This plan is gaining popularity among investors with a low risk appetite, despite the fact that it does not generate high profits.
Investors must invest a minimum of Rs.5,000 in order to participate in the fund. HDFC Bank, Motherson Sumi, TVS Motors, and Maruti Suzuki are among the firms in the ICICI Prudential MIP 25 portfolio.
What is Icici Prudential Monthly income plan?
The ICICI Pru iProtect Smart term insurance plan gives you the option of distributing the money assured to your nominee in a variety of ways. You can choose the âMonthly Incomeâ option in addition to a one-time lump-sum payout in the case of an unfavorable event. The money assured is paid to the nominee in monthly installments under a monthly income term insurance plan. The total payment is not paid all at once. These payments serve as a substitute for your wage. Instead of needing to manage enormous sums of money, your family will have adequate dollars for their day-to-day expenses with such consistent incomes. The steady inflow of cash can act as a safety net for them in the event of a financial crisis.
How good is Max Life Monthly income Advantage plan?
Please take a look at the Max life monthly income advantage plan. You will get a guaranteed monthly income for 10 years at the end of the premium-paying term, which will be 1/12th of 10% of the total assured. If your sum promised is ten lakhs, for example, your guaranteed monthly income will be 8333 (100000/12).
Is monthly income plan good?
Monthly income plans, or MIPs, on the other hand, include providing the money to the family/nominee as a fixed monthly income over a long period of time, up to 25 years.
A Monthly Income Plan is a type of mutual fund in which the investment is split evenly between equities and debt markets in a 20:80 ratio (approx.). Simply put, it is a debt-oriented mutual fund whose goal is to deliver monthly distributions to investors. The returns are not guaranteed because it is a market-linked product; instead, they are contingent on the fund’s performance.
A monthly income plan is appropriate for those who want to have a backup income source in case their normal income is interrupted. MIPs are also a good option for folks who want a guaranteed monthly income after they retire. Furthermore, a Monthly Income Plan has grown in favor as an excellent financial instrument for beating inflation while posing the least amount of risk.
The Key Features
MIP has a number of advantages over its traditional competitors, such as bank FDs and post office Monthly Income Schemes (MIS).
MIP yields higher returns (11-14%) than FDs and MIS, for starters (8-9 percent ).
Second, unlike its traditional competitors, MIP does not have a restriction on the amount of money that can be invested. MIP has no entering fee, but it does have an exit fee, which is normally 1.0 percent. Furthermore, there is no lock-in time. As a result, MIPs have more liquidity. Furthermore, MIP relieves the investor of having to monitor the funds or deal with the hassles of moving funds.
In the case of MIP, an increase in interest rate results in a decrease in NAV, whereas a decrease in interest rate results in an increase in NAV. So, when interest rates are high, it’s the greatest moment to invest in MIP.
MIPs have a one-of-a-kind mode of action. The declared dividends are only a portion of the total earnings on the funds. When there are no significant earnings on funds, the surplus is used to declare dividends in the future.
What is the monthly interest on 50 lakhs?
- If the interest rate on a fixed deposit is 6%, you will receive Rs 3 lakh after a year on a deposit of Rs 50 lakh. This translates to Rs 25,000 in monthly interest.
- If the annual interest rate on a fixed deposit of Rs 50 lakh is 6.5 percent, you will receive Rs 3.25 lakh. This translates to Rs 27,083 in monthly interest.
- If the annual interest rate on a fixed deposit of Rs 50 lakh is 7%, you will receive Rs 3.5 lakh. This translates to Rs 29,167 in monthly interest.
- If the annual interest rate on a fixed deposit of Rs 50 lakh is 7.5 percent, you will receive Rs 3.75 lakh. This translates to Rs 31,250 in monthly interest.
Is there any monthly income scheme in LIC?
This pension scheme, which was launched by LIC in 2017 for elderly residents, will be available for purchase for another three years, till March 2023. The scheme will generate 7.40 percent interest per month in the current year of 2021, which will be completely taxed. The large returns are the key draw of this strategy.
What is SBI Magnum Monthly income plan?
SBI Debt Hybrid Fund is a conservative hybrid fund managed by SBI Asset Management. In April 2001, it was introduced as a monthly income plan called SBI Magnum Monthly Income Plan. Over the last three and five years, the strategy has generated attractive returns of 6.84 percent and 9.30 percent, respectively (as of January 2019).
What are guaranteed income plan?
The word “guarantee” can reassure a large number of consumers just by appearing in an investment plan. A non-participating monthly income scheme is known as a guaranteed income plan. For the term of the plan, you select to pay an annual premium. The length of time can be determined based on your current age and financial situation.
When the policy reaches maturity, you will be assured a payout that is similar to a regular wage for a set number of years. The number of years is determined by the insurance coverage chosen, the premium paid, and the sum assured at the plan’s maturity. The policy term thus comprises the amount of time that the premium must be paid as well as the amount of time that the payout must be received.
Can I cancel Max Life Monthly income Advantage plan?
Each premium must be paid within 30 days after the due date. This plan does not provide a loan option. The policy cannot be surrendered until the surrender value has been reached. The surrender value will be paid to the policyholder once the surrender value has been collected.