Best Monthly Income Funds for NRI/ OCI/ PIO in 2024

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.

About Monthly Income Funds in 2024 for NRI/ OCI/ PIO

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.

Investment Plans for NRIsInvestment Plans for NRIs

Check out: Investment Plan for NRI

List of Best Monthly Income Funds in India for NRI/ OCI/ PIO

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 
Medium Duration
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
Overnight
-- 0.55% 0.55% 0.53% 0.55%
Quant Focused Fund
Focused Fund
2 years 10 months -1.71% 6.62% 7.88% 0.26%
Quant Multi Asset Fund
Multi-Asset Allocation
2 years 9 months -1.06% 5.14% 3.73% -0.69%
Quant Tax Plan
ELSS
2 years 7 months 0.1% 6% 5.17% 2.18%
Mirae Asset Tax Saver Fund
ELSS
3 years 0.45% 4.36% 4.51% 3.42%
ICICI Prudential Value Discovery Fund
Value Oriented
2 years 9 months -0.42% 5.89% 4.54% 2.3%
Aditya Birla Sun Life Floating Rate Fund
Floater
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%

Key Features of Best Monthly Income Funds for NRI/ OCI/ PIO

The key features of the best Monthly Income Funds are mentioned in the table below:

Feature Description
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
Suitable for
  • Retirees
  • Senior citizens
  • Conservative investors
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

Investment Plans for NRIsInvestment Plans for NRIs

Benefits of Investing in Monthly Income Funds for NRIs/ OCI/ PIOs

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.

SIP Investment for NRIsSIP Investment for NRIs

Read Here: How to Get 50k pension per month?

Important Factors to Consider for NRIs/ OCI/ PIO to Invest in the Best Income Funds

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.

investment plans for nrisinvestment plans for nris

Check Out Here: Best SIP Plans for NRI

Key Takeaways

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.

FAQ's

  • How to invest Rs. 1 crore in India for monthly income?

    Following are some of the ways to invest Rs. 1 crore in India for monthly income:
  • How to invest Rs. 25 lakhs for monthly income in India?

    There are a number of ways to invest Rs. 25 lakhs for monthly income in India. Some of the most popular monthly income fund options are:
    • 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)

  • How to invest Rs. 1 lakh for monthly income in India?

    To invest Rs. 1 lakh for monthly income in India, you can consider the following options:
    • Money Back Policies

    • Debt Mutual Funds 

    • Fixed deposits (FDs)

  • How much should I invest to get Rs. 50,000 per month in India?

    To get Rs. 50,000 per month in India, you would need to invest around Rs. 60 lakhs, assuming an annual return of 10%. This is because Rs. 60 lakhs invested at 10% annual return would generate Rs. 6 lakhs per year, which is equivalent to Rs. 50,000 per month.

Past 10 Year annualised returns as on 01-04-2024

^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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