What is a regular IDCW plan in a mutual fund scheme?

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I am planning to invest in Mirae Asset Tax Saver Fund for a long term. Is it a good fund? What is the difference between a Regular IDCW scheme plan and Regular growth scheme plan?
— Kishan Jaiswal

Subir Jha, founder, Buckspeak, a financial planning firm based in Hyderabad, responds:

Mirae Asset Tax Saver Fund is a good fund . It has done well since its launch in November 2015 . You could also look at funds like DSP Tax Saver, which have a longer track record ( November 2006 ) . Regular IDCW is the erstwhile dividend option, wherein a certain portion of your growth is paid out to you as an ‘income’ . Under the Growth scheme, the capital keeps growing and you get bigger benefit of the compounding . I wouldn’t recommend IDCW in an equity fund , since you are trying to draw an income from an instrument, which is best suited for long term compounding. In case you want a regular income, there are other options to consider.

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