MIP Your Monthly Income Plan

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How MIP Helps to Earn Monthly Income:

Being investor if you’re looking for the financial scheme where you would like to put lump-sum amount to get higher regular income from the invested amount then this article is for you. Monthly Income Plan, MIP will help you to achieve your motive. It’s been observed that MIP provides the more returns than the Banks fixed deposit return.

MIP, a monthly income plan as the name suggest is a scheme where the investor receives the sum amount of money on invested capital every month. When investor starts investing money regularly in the form of premium investors are eligible to receive the money which is based on the compounding formula.

MIP is well known monthly income plan, as they are more popularly known category of the mutual funds. MIP mutual fund category invest more than 90% in debt and remaining in equity stocks to ensure the high returns.

Otherwise you can simply understand the formula of MIP Investment, 10% to 30% investment is into the equity and remaining into the debt related instruments.

MIP does not provide any sort of assurance of monthly income. Any returns coming from the MIP mutual funds are market driven and subject to market rise. MIP’s main motive is to provide the constant bracket-based returns on your investment. Usually these returns are either monthly, quarterly, half-quarterly, and annual. You can also see the option of capital appreciation rather than taking monthly income on your investments.

MIP is suitable for the investors who are keen to play safely for a long term with minimum risk as these funds mainly aim debt investment then the equity investment. Main advantage of the MIP fund is you can redeem your fund at any time. Dividend received from MIP are falls under the tax-free category. However capital gain out of the investment at the time of redemption would be subject to tax which is also applicable to any other debt fund.

MIP is mostly suitable for the one who is looking for the market linked solution which provides a monthly income. Anyone who intend to invest into the medium risk based financial scheme can consider MIP mutual find as the investment opportunity.

Key Benefits of MIP Mutual Funds:

Being investor looking for option which will gives you the monthly income then MIP mutual fund is best for you.

  • MIP Mutual fund will provide the regular basis pay-outs.
  • MIP Mutual funds are balanced one as they invest max potion of the capital in debt and remaining in equity as a aggressive investment.
  • MIP is return are high comparatively fixed deposit return
  • MIP enable investor to either enjoy the monthly returns or you can opt annual capital appreciation option

Types of MIP Mutual Funds:

Dividend Based MIP:

If you invest into the MIP mutual fund with the dividend-based option then you are eligible to receive regular income on the basis of capital appreciation in the form of dividend. Return will be monthly, quarterly or half quarterly basis.

Growth Based MIP Mutual Fund:

If you’re not looking for the monthly basis return on your investment then you can opt for the growth-based return option. Where you will get the capital appreciation until and unless you sell your mutual fund units.

Let’s see the example to understand above two types in more detail:

If you’re investing $10,000 in MIP Mutual Fund with the first option i.e. Dividend based MIP and you’re getting 13% return per annum i.e. $1300 return per year and monthly you’re getting $108 without touching to your capital you’re getting this much of return.

If you’re investing the similar $10,000 in MIP Mutual Find with growth-based option then you’re entitled to get the returns on your capital which will market based appreciation and you will not be getting the monthly based return.

Everything has its own plus and minus sides. MIP Mutual funds also have few own limitations. MIP never provide fixed return guarantee like banks do. MIP Mutual Funds are volatile in nature some time they will not offer any sort of dividend, it totally depends on the market movements.

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