New Delhi, Oct. 5 -- Equity mutual funds invest in shares of listed companies that may pay dividends to their shareholders. So, when a company in a mutual fund's portfolio declares a dividend, the fund receives that dividend, but that does not necessarily mean the amount will be credited separately to investors' bank accounts.

This is because of the type of mutual fund option you have chosen. When you are making an investment, you have to choose between a growth or dividend plan, which is also known as income distribution cum capital withdrawal (IDCW).

These two options represent different ways in which income generated by a mutual fund is distributed to investors. However, it's important to know that not all mutual funds earn dividends...