Mutual Funds with Monthly Dividend

Mutual Funds with Monthly Dividend (Income Distribution)

✅ Overview:

Mutual funds that offer monthly dividend payouts (technically called Income Distribution cum Capital Withdrawal – IDCW) are ideal for investors looking for regular income, such as retirees or conservative investors. These funds distribute surplus income (if any) generated during the period, usually from debt, hybrid, or dividend-yielding equity schemes.

🔍 Key Features of Monthly Dividend Mutual Funds:

- Monthly payouts: Income is distributed (if available) every month.
- Not guaranteed: Dividends depend on the fund’s distributable surplus and are not fixed or assured.
- Taxation: IDCW is added to your income and taxed as per your applicable tax slab.
- Suitable for: Investors needing regular cash flows, like retirees, homemakers, or conservative investors.

📊 Examples of Popular Mutual Funds Offering Monthly Dividend (IDCW) Options (as of 2025):

Mutual Fund Scheme	Category	Type	IDCW Frequency
HDFC Hybrid Debt Fund	Hybrid	Monthly IDCW	Monthly
ICICI Prudential Regular Savings Fund	Hybrid	Monthly IDCW	Monthly
Aditya Birla Sun Life Regular Savings Fund	Hybrid	Monthly IDCW	Monthly
SBI Equity Hybrid Fund	Hybrid	Monthly IDCW	Monthly
Kotak Monthly Income Plan	Debt-oriented Hybrid	Monthly IDCW	Monthly
UTI Regular Savings Fund	Hybrid	Monthly IDCW	Monthly

Note: IDCW payout is subject to availability of surplus. Always check latest fact sheets or consult a mutual fund distributor.

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⚠️ Pros and Cons:
✅ Pros:
Regular income
Good for conservative investors
Can be used as passive cash flow for expenses
❌ Cons:
No assurance of payout every month
Taxable as per income slab
Reduces NAV of the fund over time
🧠 Pro Tip:
If you do not require monthly income, consider opting for Growth option instead of IDCW. Growth funds may yield better long-term wealth creation as they reinvest returns rather than distribute them.

Frequently Asked Questions (FAQs) on SIP

They are relatively safer if you choose debt or hybrid funds, but they still carry market risks. Equity-based monthly payout funds are more volatile.