Invest In The Mutual Fund’s Monthly Income Plan, Money Will Come Into Your Pocket Every Month
If you are planning for regular income after retirement, then this news can prove to be useful for you. We are going to tell you about investing in Monthly Income Plans of Mutual Funds.
It is an open-ended fund. This is because, despite the low risk, it gives higher returns than the fixed deposits of banks or post offices.
It is a good investment for those who want to increase their regular income with low risk or who have few days left in retirement.
What is an investment in MIP?
If you are considering investing in MIPs, who wants to invest some part of your savings in the equity market?
Experts say that a monthly income plan can be better for those who want to maintain a regular cash flow to meet their day-to-day needs. To maintain this cash flow, planning should be done in advance.
Works like this
MIPs are called Conservative Hybrid Funds. About 75-90 percent of it is invested in debt instruments, and the remaining 10 to 25 percent in equities.
Due to this composite portfolio, there is a balance between safety and return on investments made in it. Even if there is a weakness in the stock market, there is not much effect on the returns. There is no limit and no lock-in period for investing in MIPs.
No guarantee of dividend return
Let us tell you that the part of this fund that is invested in equities, gives higher returns than debt instruments.
The monthly dividend payout received on MIP depends on the performance of the Monthly Dividend Payout Fund.
There is no guarantee of return or dividend on the part invested in equity, it is directly affected by the volatility of the stock market.
Will get tax on dividend return
The amount of tax to be paid on the returns from MIPs depends on how much of the fund is invested in equities.
Like the interest earned on bank FDs or post office, MIP dividend returns are also taxed according to the taxpayer’s slab.
If the fund is invested for a period of more than 3 years, then capital gains are taxed at 20 percent after indexation. Due to this, the investors come in a higher slab of tax benefit.
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