MIPs are the type of mutual funds that invest in debt instruments. However, only 10-20% of assets are allocated to equities. But the name i.e. Monthly Income Plan is contradiction as these funds doesn’t guarantee monthly income. Just like any other fund, the returns are derived by market. However, many funds struggle to declare monthly dividends as these funds don’t have any such obligation. MIPs are offered with an objective of giving monthly returns to investors; however the periodicity of these funds depends on the option opted by an investor. These are usually annual, half-yearly, quarterly or monthly options. Also, the growth option is presented, where the traders don’t get timely dividends, but these gain in respect to capital appreciation. The income is provided in the form of interest and dividend.