Earning money every month without selling your time daily. Sounds nice right. That’s where monthly income mutual funds come into play. In 2025, investors in India are searching for stability, not just crazy double-digit returns. Markets are volatile, inflation eats up savings, and FD rates sometimes don’t beat real costs of living. People need something in between—steady cash inflow plus little growth for the future. Mutual funds designed for monthly income are built on that idea.
Now, before diving into the actual list, let’s keep it real. These funds don’t guarantee fixed salary-like payouts every month. They are structured in a way to provide “regular income,” which often comes in form of SWP (systematic withdrawal plans), dividends or interest from debt instruments. Equity part in these funds is like an extra booster. So you get regular income, but also small growth over long term.
top 3 mutual funds for monthly income in 2025 that look good , balanced, and investor-friendly.
1. ICICI Prudential MIP 25 – Consistency with balance
When someone talks about monthly income funds, ICICI Prudential MIP 25 often comes in top mentions. Reason is simple. This fund has been in market for a long time, and it has kind of mastered the art of balancing debt and equity. Majority of portfolio goes into debt instruments—corporate bonds, government securities—things that give predictable income. Around 15–20% stays in equity for growth kick.
In 2025, this fund is showing steady returns in range of 7–9% annually. Not sky-high, but that’s the point. Investors who choose it are not chasing jackpot. They want money flowing every month. And ICICI Pru has a strong track record of handling risks. Even when equity markets swing hard, its debt exposure covers stability.
If you are a retiree or even someone planning side income, this option stands out. The payout plan can be customized—monthly, quarterly, or growth reinvestment. But yes, remember, dividends are not guaranteed. SWP method is more predictable.
Small warning. Since this is hybrid debt-oriented fund, tax rules apply accordingly. Gains are taxed as per debt fund taxation. So plan your withdrawals carefully.
2. Aditya Birla Sun Life Regular Savings Fund – Stability with edge
Next is Aditya Birla Sun Life Regular Savings Fund. A name that has been around, and in 2025 still holds its place among steady monthly income providers. The fund strategy is tilted more towards debt, with around 70–80% in safe instruments. Rest is in equity and sometimes gold ETFs. This extra layer makes it slightly more dynamic than simple debt fund.
Investors like it for one key reason—reliability. Over 5 years average returns are hovering around 7–8%. Not bad when you compare with FDs, especially because here you also get inflation-beating capacity. Monthly payouts are possible, but again, better to use SWP route if you want certainty.
One more interesting part—this fund has flexible options. Some investors don’t want monthly cash but prefer to accumulate and withdraw later. Aditya Birla Sun Life scheme allows that. For conservative investors, it’s like a safe pit stop. For moderate risk takers, equity exposure adds flavor.
But. And there’s always a but. If equity markets go down, short-term NAV dips are unavoidable. So if you check your statement every week, you may panic. Best approach: stay long-term, focus on regular withdrawals, not daily NAV.
3. DSP BlackRock Regular Savings Fund – Reliable hybrid choice
The third strong pick in 2025 for monthly income seekers is DSP BlackRock Regular Savings Fund. DSP has reputation of managing balanced funds quite effectively. This one follows same path. Debt heavy, with limited equity exposure, giving balance of safety and growth.
The appeal here is consistency. Investors report smoother cash flow when using SWP in this scheme. Fund managers actively monitor portfolio, avoiding very risky bonds. It’s not about chasing high yield junk bonds, but about steady inflows.
Returns in recent years average 7–8%, similar to peers. But the difference is slightly better risk management during market downturns. DSP handled pandemic crash more smoothly compared to some rivals. That trust factor makes people stick with it.
In 2025, it continues to be among the top options for people who want regular money. Especially retirees, or those with extra corpus looking for side income.
Why monthly income funds matter in 2025
Now, let’s zoom out. Why are these funds suddenly in spotlight in 2025. Few reasons:
- Inflation is eating savings faster than expected.
- Traditional FD interest, though improved, still fails to beat inflation in many cases.
- Equity market is volatile, not everyone has appetite to ride full risk.
- People want predictable cash flow, something like a mini salary.
Monthly income mutual funds sit right in middle. They are safer than pure equity, more rewarding than FDs, and flexible compared to insurance plans.
Things to keep in mind before investing
Before you jump in, few points you shouldn’t ignore:
- Not a fixed pension – Monthly income funds aim to provide regular payouts, but not guaranteed. Always keep backup.
- Tax rules – Since these are hybrid debt-oriented, taxation is like debt funds. Short-term gains taxed as per income slab, long-term after 3 years taxed with indexation benefit.
- Use SWP wisely – Instead of waiting for dividends, set up systematic withdrawal plan for consistent inflow.
- Risk still exists – Equity portion can cause NAV fluctuations. Even debt side can get hit if interest rates move sharply.
- Match with your needs – Retirees want stable monthly cash. Younger investors may use it as side income while corpus grows. Choose plan accordingly.
Quick comparison table
| Fund Name | Portfolio Mix | Avg. 5-Year Returns | Best For |
|---|---|---|---|
| ICICI Prudential MIP 25 | 75–80% Debt, 20% Equity | 7–9% | Retirees, side income seekers |
| Aditya Birla Sun Life Regular Savings | 70–80% Debt, 15–20% Equity, some Gold | 7–8% | Conservative + moderate investors |
| DSP BlackRock Regular Savings Fund | 75–85% Debt, 15–20% Equity | 7–8% | Investors wanting smoother payouts |
Final Thought
At the end of day, monthly income mutual funds are not magic money machines. They are tools. Tools that help you create a steady flow of money while protecting capital reasonably well. In 2025, ICICI Prudential MIP 25, Aditya Birla Sun Life Regular Savings Fund, and DSP BlackRock Regular Savings Fund stand out as smart choices.
If you’re retired, they give you a way to live without worrying about FD renewals every year. If you’re still working, they can act like second income source. But don’t put all eggs in one basket. Mix them with other investments, keep emergency fund aside, and review performance every year.
Remember, monthly income funds are about balance. Not too risky, not too boring. In current times, that balance is exactly what investors are searching for.
