How my father can draw a regular return mutual funds

The funds selected by your father for monthly SIPs is good. The investment horizon for these SIPs should ideally be 5 years as the selected funds are from Balanced, Mid Cap and Large Cap categories.

For getting a regular return by investing his fixed deposits into mutual funds, we have the following suggestions –

Fixed deposit is the safest option for retirees but the way interest rates are coming down, fixed deposits will not generate more than 1-2% inflation adjusted returns.

Even though mutual funds generate better inflation adjusted returns, the same may not be suitable for risk averse investors. Investors who can take some risk should only invest in mutual funds. For earning regular return from mutual funds, the retirees can invest in hybrid mutual funds, also known as MIPs or balanced funds. There are two kinds of hybrid funds –

1) Hybrid debt oriented funds, which are popularly known as MIPs. These funds invest 5-35% in equities and rest in debt instruments. The taxation for these funds is like debt funds. Short term capital gain is taxed according to the tax slab of the investors and long term capital gain (holding period more than 3 years) is taxed @20% after indexation. Dividend received from these funds is tax free in the hands of the investors but the scheme has to pay 28.84% dividend distribution tax.

Some of the top performing funds in this category are – ICICI Prudential MIP 25 Plan, Birla Sun Life MIP II Wealth 25 Plan, UTI MIS Advantage Growth. Please check a comprehensive list here https://www.advisorkhoj.com/mutual-funds...

2) Hybrid equity oriented funds – These funds are also known as balanced funds and is one of the most popular category of funds for retired individuals. Balanced funds invest up to 65% in equities and rest in debt instruments. The taxation for these funds is like equity funds. Short term capital gain is taxed @15% and long term capital gain (holding period of more than one year) is completely tax free. Dividends received from these funds are also tax free in the hands of the investors.

Some of the top performing balanced funds are – ICICI Prudential Balanced Fund, SBI Magnum Balanced Fund, DSP BlackRock Balanced Fund and HDFC Balanced Fund. See a comprehensive list here https://www.advisorkhoj.com/mutual-funds...

If your father can take some amount of risk and if he has at least 5 years of investment horizon then he can invest in MIPs and Balanced Funds. He can opt for either monthly or quarterly dividends or withdraw a fixed amount monthly through SWP. SWPs are the best option for getting a regular withdrawal from your investments.

Please read the following articles to understand it better.

https://www.advisorkhoj.com/articles/Mutual-Funds...

https://www.advisorkhoj.com/articles/Mutual-Funds...

https://www.advisorkhoj.com/post-your-queries...

with regards to keeping investments for an emergency corpus, your father can invest in liquid or ultra short term funds like, Birla Sun Life Savings Fund, ICICI Prudential Ultra Short Term Fund and HDFC Cash Management Fund Treasury Advantage Plan.

Hope the above helps. Thanking you in anticipation.