In which mutual fund my father can invest to get regular returns

You have written about the investment need of your father but not mentioned his ability to take risk. Though mutual fund provides solution for the needs your father has, there is some amount of risk involved in it.

Now let us see what are the solutions available to him - 1) If he can take moderate risk and the investment horizon is minimum 3 years, he can invest in hybrid debt funds, also known as MIPs, and opt for monthly/ quarterly dividend pay-out option. In these funds, he can get total annual dividends between 6-8% and some capital appreciation too! 2) However, if he can take moderately high risk with 5 year investment horizon, he can invest in monthly dividend paying balanced funds. In the last 2-3 years, balanced funds have become very popular with investors looking for regular returns. Balanced funds are also very tax efficient as long term capital gains (after 12 months) are tax free and the dividends paid by balanced funds are also tax free!

Though the dividends are not guaranteed in mutual funds, whether it is MIP or balanced funds, you can depend on the track record of schemes declaring monthly/ quarterly dividends.

Some of the top performing balanced funds are paying around 8-11% annual dividend (paid monthly or quarterly). Over and above this you can expect capital appreciation over a long period of time.

Please check this section on our website to know the performance as well as dividend pay-out details of MIPs and balanced funds Mutual Fund Category-wise Dividends

Hope the above helps! Thanks for writing to Advisorkhoj!