MIPs - Post office or Mutual funds

What are MIPs - monthly income plans?
MIPs invest predominantly in debt instruments with a small portion of assets allocated to equities. The equity component provides MIPs with just the edge it needs to outperform conventional debt funds. The equity component usually varies between 5%-30% of assets.
Between post office and mutual funds MIPs-
If regularity of income and safety of capital are your prime concerns and you do not have any other source of income to meet your monthly expenses, then you should invest in a secured avenue that provides stable return. In this case, you may invest in Post Office MIP that is backed by the government. This scheme will enable you to earn a fixed return of 8 per cent per annum.

The mutual fund MIP aims to generate regular returns through investments primarily in debt and money market instruments (minimum of 75 per cent of its total assets). But remember that a fund such as this involves risk and does not come with a guarantee of either assured returns or capital protection.