Monthly income funds are investment options designed to provide regular and stable income to Non-Resident Indians (NRIs), Overseas Citizens of India (OCI), and Persons of Indian Origin (PIO). These funds offer a convenient avenue for individuals living abroad. Overseas Indians can invest in the Indian financial market through financial instruments like bonds, debt securities, and money market instruments. These best income funds are managed by professional fund managers who aim to optimize returns while managing risk with asset diversification.
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Let's explore some of the best monthly income funds for NRI/ OCI/ PIO, highlighting their key features and benefits.
Monthly income funds are a type of investment option that focuses on generating a steady stream of income for individuals like NRI, OCI, and PIO. These funds primarily invest in fixed-income securities and debt instruments.
The best income funds typically allocate a significant portion, around 70-80% of their assets, into debt securities, while the remaining 20-30% may be invested in stocks. This balanced approach aims to provide a mix of risk and return that suits various investors' preferences.
For NRIs, OCI, and PIO, monthly income funds can be an attractive choice, especially for retirees or senior citizens seeking a reliable source of income. Additionally, these funds can serve as a prudent option if you prefer a more conservative investment strategy.
NOTE: Income Funds are not guaranteed to generate a fixed return. The amount of income that you receive will depends on the performance of the fund.
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|Monthly Income Fund Name||Investment Doubled in||Monthly Returns in August 2023||Monthly Returns in July 2023||Monthly Returns in June 2023||Monthly Returns in May 2023|
|Aditya Birla Sun Life Medium Term Fund
|8 years 1 month||0.61%||0.51%||0.29%||1.01%|
|ICICI Prudential Income Optimizer Fund (FOF)
Hybrid Fund of Funds (FoF)
|7 years 6 months||0.48%||2.8%||2.05%||1.64%|
|Axis Overnight Fund
|Quant Focused Fund
|2 years 10 months||-1.71%||6.62%||7.88%||0.26%|
|Quant Multi Asset Fund
|2 years 9 months||-1.06%||5.14%||3.73%||-0.69%|
|Quant Tax Plan
|2 years 7 months||0.1%||6%||5.17%||2.18%|
|Mirae Asset Tax Saver Fund
|ICICI Prudential Value Discovery Fund
|2 years 9 months||-0.42%||5.89%||4.54%||2.3%|
|Aditya Birla Sun Life Floating Rate Fund
|9 years 4 months||0.63%||0.71%||0.57%||0.69%|
|Bandhan Banking & PSU Debt Fund
Banking and PSU
|9 years 5 months||0.48%||0.56%||0.25%||0.74%|
The key features of the best Monthly Income Funds are mentioned in the table below:
|Investment Focus||Primarily in debt and fixed-income securities|
|Asset Allocation||70-80% in debt, 20-30% in equity for balanced risk|
|Regular Income Stream||Aimed at providing a consistent source of income|
|Diversification||Portfolio diversified across various debt instruments|
|Risk Profile||Generally lower risk due to emphasis on debt instruments|
|Potential Returns||Moderate returns compared to equity-focused funds|
|Tax Efficiency||Tax benefits on long-term capital gains.
NRIs/OCI/PIO are taxed on their capital gains from income funds at a concessional rate of 15%.
|Liquidity||Generally liquid, allowing withdrawals as needed|
|Professional Management||Experienced fund managers oversee investments|
|Investment Options||Available through mutual funds or ULIPs|
Monthly income funds offer a number of benefits to NRI/OCI/PIO, some of which are mentioned below:
Steady Income: Monthly Income Funds offer a consistent source of income, making them ideal for those seeking regular payouts.
Risk Management: With a significant focus on debt securities, these funds generally come with lower risk compared to equity investments.
Diversification: Investments are spread across various debt instruments, reducing the impact of individual asset performance.
Suitable for Retirees: They are well-suited for retirees and senior citizens looking for reliable income during retirement.
Professional Management: Expert fund managers handle investments, ensuring optimal returns while managing risk.
Tax Efficiency: Some funds offer tax benefits on long-term capital gains, enhancing overall returns.
Liquidity: Monthly Income Funds are often liquid, allowing investors to access their money when needed.
Conservative Approach: These funds follow a more conservative investment strategy, making them suitable for risk-averse investors.
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NRI/ OCI/ PIOs should consider the following factors before starting to invest in the best income funds:
Income Needs: Assess your regular income requirements, as Monthly Income Funds cater to those seeking steady payouts.
Risk Preference: Determine your risk tolerance and choose funds that match your comfort level, especially since these funds often focus on lower-risk debt securities.
Asset Allocation: Understand the fund's allocation between debt and equity, which impacts both risk and potential returns.
Expense Ratio: Ensure a lower expense ratio, as it will lead to higher returns for the NRI, OCI, or PIO investor over time. The expense ratio is a percentage of the fund's assets that is deducted annually to cover the costs of managing the fund.
Professional Management: Research the fund manager's expertise and track record in managing investments.
Diversification: Ensure the fund diversifies across various debt instruments for risk reduction.
Tax Considerations: Be aware of the tax implications, including any tax benefits or obligations for NRIs/OCI/PIO.
Liquidity Needs: Consider how easily you can access your invested money in case of unforeseen expenses or emergencies.
Investment Horizon: Determine your investment time frame, aligning it with your financial goals.
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The best monthly income funds offer NRI, OCI, and PIO category investors a reliable avenue for generating a steady stream of income with lower risk. These funds are well-suited for retirees and risk-averse investors. Professional fund management, diversification, and potential tax benefits are some of the key advantages. Carefully considering your financial goals and risk tolerance is essential in choosing the right monthly income fund to meet your specific needs.
Money Back Policies
Monthly Income Funds
Monthly Income Plans
Systematic Withdrawal Plans (SWP)
Post Office Monthly Income Scheme (PO-MIS)
Real Estate Investment Trusts (REITs)
Money Back Policies
Debt Mutual Funds
Fixed deposits (FDs)
Past 10 Year annualised returns as on 01-11-2023
^Tax benefit are for Investments made up to Rs.2.5 L/ yr and are subject to change as per tax laws.
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
Tax benefit is subject to changes in tax laws. Standard T&C Apply
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