SIP or Systematic Investment Plan is a method of investing a fixed amount in mutual fund schemes on a monthly or quarterly basis. The minimum SIP amount is set by the fund house. All you need to do is choose your preferred SIP amount, link your bank account and start investing. SIPs bring financial discipline to an investor’s life and are considered as a suitable investment mode for beginner investors. However, it’s important to consider certain factors before investing, so that you can select the best SIP plans. We’ve compiled a list of the best SIP plans along with their returns potential and other features. Let’s dive in!
Did You Know?
You can start investing in SIP plans with as low as Rs.10!
In SIP, mutual fund units are purchased at predetermined intervals based on their Net asset value, or NAV. These SIP units continue to accumulate until the end of your investment period. When you redeem those units, the value of the units is credited to your account.
For example, let’s say you have invested Rs.2000 via a monthly SIP and have set the 7th as the deduction date. This means that the amount will be automatically deducted from your bank account on the 7th of every month and auto-credits to the mutual fund.
If you continue investing small amounts in a scheme at regular intervals, you will end up accumulating a large sum of money, thanks to the power of compounding. That said, it’s essential that you stay invested for as long as you can to maximise your returns while investing in top SIP mutual funds.
Here are the top 10 SIP plans you can invest in:
|Best SIP Plans||Features||Minimum SIP Amount|
|Navi Nifty Next 50 Index Fund – Growth||NAV: ₹8.74|
AUM: ₹95.61 Crore
Expense Ratio: 0.12%
|Canara Robeco Bluechip Equity Fund – Growth||NAV: ₹45.76|
AUM: ₹8642.25 Crore
Expense Ratio: 0.42%
|HDFC Index S&P BSE Sensex Direct Plan Growth||NAV: ₹547.95|
AUM: ₹4,141.51 Crore
Expense Ratio: 0.2%
|Axis Bluechip Fund Direct-Growth||NAV: ₹471.3|
AUM: ₹35,197.66 crore
Expense Ratio: 0.56%
|Mirae Asset Large Cap Fund Direct Plan-Growth||NAV: ₹84.97|
AUM: ₹34,194.26 Crore
Expense Ratio: 0.53%
|ICICI Prudential Technology Fund Growth||NAV: ₹148.12|
AUM: ₹8,794.16 Crore
Expense Ratio: 0.89%
|PGIM India Flexi Cap Fund Direct-Growth||NAV: ₹27.69|
AUM: ₹5,283.6 Crore
Expense Ratio: 0.37%
|SBI Focused Equity Fund||NAV: ₹238.72|
AUM: ₹27,818.57 Crore
Expense Ratio: 0.69%
|IDFC Nifty 50 Index Fund||NAV: ₹37.59|
AUM: ₹582.43 Crore
Expense Ratio: 0.10%
|Quant Mid Cap Fund||NAV: ₹139.11|
AUM: ₹1,329.97 Crore
Expense Ratio: 0.63%
Navi Nifty Next 50 Index Fund is one of the best SIP investment plans. The fund invests 100.4% of its assets in domestic equities, with 58.74% in Large Cap stocks, 30.92% in Mid Cap stocks, and 1.73% in Small Cap stocks. Suitable for investors who are looking for long term growth and wealth generation.
Canara Robeco Bluechip Equity Fund is another best fund to invest via SIPs. This fund’s investment objective is to provide capital appreciation by investing primarily in companies with a large market capitalization. It is a large cap fund that invests 96.05% of its assets in domestic equities, 73.88% of which are in large cap stocks and 6.78% in mid cap stocks.
The HDFC Index S&P BSE Sensex is appropriate for investors looking for returns comparable to the NIFTY 50. This fund invests 100.02% of its assets in domestic equities, with Large Cap stocks accounting for 86.95% of the total.
Axis Bluechip Fund is a direct investment fund that invests 7.41% of its assets in domestic equities, 72.2% of which are Large Cap stocks and 3.08% are Mid Cap stocks. It also has 0.81% invested in debt, with 0.81% in government securities. Suitable for investors seeking high returns on investments for at least three to four years. It is one of the top SIPs to invest in, considering the following details.
Mirae Asset Large Cap Fund seeks to combine the consistency of large caps with a few conviction ideas from mid caps and other small caps. The investment strategy is centered on participating in high-quality businesses at a reasonable price and holding them for an extended period of time. The scheme seeks to identify companies with a sustainable competitive advantage – stocks with strong pricing power and sector leadership.
ICICI Prudential Technology The fund invests 92.6% of its assets in domestic equities, with 77.52% in Large Cap stocks, 5.12% in Mid Cap stocks, and 5.43% in Small Cap stocks. The fund has 0.16% invested in debt, with 0.16% in government securities. suitable for fortification Investors with advanced knowledge of macrotrends who prefer to make selective bets for higher returns than other Equity funds.
PGIM India Flexi Cap Fund is one of the best mutual funds to invest in SIP as it has 89.48% investment in domestic equities, 42.84% in Large Cap stocks, 14.41% in Mid Cap stocks and 11.06% in Small Cap stocks. Additionally, the Fund has 0.2% invested in government securities and 0.2% in debt. This fund is a good option for investors who plan to keep their money invested for at least three to four years.
SBI Focused Equity Fund is good for investors who have in-depth knowledge of macro trends and desire to place selected bets for higher returns compared to other Equity funds. The fund invests 87.33% of their portfolio in domestic equities, with 44.27% of that amount invested in large-cap stocks, 21.18% in mid-cap stocks, and 4.88% in small-cap stocks.
IDFC Nifty Fund has two plans: Regular Plan and Direct Plan, both of which have a common portfolio but different NAVs. Each of the plans provides a cumulative capital withdrawal option for growth and income distribution. Payout of Income Distribution cum capital withdrawal option, Reinvestment Income Distribution cum capital withdrawal option, and Transfer of Income Distribution cum capital withdrawal option are available under both plans (from Equity Schemes to Debt Schemes Only). The index funds can be distributed from investors’ capital (Equalization Reserve), which is a portion of the sale price representing realised gains.
Quant Mid Cap Fund invests 95.51% of its assets in domestic equities, with 24.51% in Large Cap stocks, 45.67% in Mid Cap stocks, and 11.37% in Small Cap stocks. Suitable for long-term investors seeking high returns.
*Data taken from respective AMC websites on Feb 28, 2023. Sata for illustrative purposes only. Past performance is no guarantee of future returns.
Disclaimer: Mutual fund investments are subject to market risks, read all offer documents carefully.
This type of SIP allows you to increase/decrease the periodic investment as per your needs. The amount is fixed when starting the investment but you can change it 7 days before paying the installment.
Regular SIPs have a start and an end date. However, perpetual SIPs do not have a defined time for the end date and continue the investment till you give specific instructions to stop it.
With this, you can increase the existing SIP amount periodically. This facility is useful for when you start earning more and want to increase your investment. Out of these, anyone could be the best SIP plan for you, depending upon your money and needs.
This refers to mutual funds with 65% or more exposure to equity and equity-related investments. LTCG (Long Term Capital Gains) above Rs.1 lakh istaxed at 10% whereas STCG (ShortTerm Capital Gain) is taxed at 15%. However, gains belowRs.1 lakh are exempt from tax.
This refers to all mutual funds with less than 65% exposure to equities. For a holding period of less than three years, STCGs are taxed as per your income bracket/tax slab you fall under. If the holding period is more than 3 years, LTCGs are taxed at 20% after indexation.
|Degree of Comparison||Fixed Deposit||SIP|
|Investment Type||Lump Sum||In Installments|
|Nature of Returns||Interest||Dividend Capital and Gains|
|Suitable for||Conservative Investors||Aggressive and Conservative Investors|
|Tax on Returns||Tax is levied according to the investor’s income tax bracket||LTCG of 10% and STCG of 15% tax imposed on returns for equity investments|
SIPs and Fixed Deposits have different investment goals, but both allow you to diversify your portfolio and earn returns on your investment. SIP is a mutual fund investment mode which also allows investors to invest in other funds. Fixed Deposits, on the other hand, are bank deposits that involve a lump sum investment at a fixed rate of interest for a set period of time; the duration of fixed deposits is flexible. It can range from 7 days to 10 years.
SIPs are mutual fund investments that are always subject to market risk. Fixed deposits, on the other hand, provide guaranteed returns, making them ideal for investors seeking less risky investments. Fixed deposits provide low liquidity because they have a lock-in period, whereas SIPs provide high liquidity as the investment is open-ended and you can redeem your holdings at any time without affecting its market value, and there is no charge for stopping a SIP.
The Returns on Fixed Deposit are extremely low compared to returns on SIP For example, let’s say you have invested Rs.1 lakh in FD, the maturity period is 5 years and the interest rate offered is 8%. Upon maturity, you would get Rs.1.48 lakh. Now assume you have invested Rs.1500 every month in equity index funds via SIPs for the same period as FD. However, equity mutual funds have the potential to offer more than 20% returns. If we consider 20% returns, the total value of your investment after 5 years would be Rs.1.71 lakh.
That being said, mutual funds are prone to market volatility and you might not get the returns as expected. As an investor, you should park a certain amount in FDs for safety, while simultaneously investing in SIPs in order to generate inflation-beating returns. It is also possible to mitigate mutual fund investment risks by staying invested for the long run.
Here are 6 reasons to invest in best SIP mutual fund plans!
With an SIP plan, your account accumulates additional units depending on market rates. With each investment, the reinvested amount will increase, leading to growth in portfolio value. Hence, even with small investments over time, you can accumulate substantial wealth over the long term.
When you invest a fixed amount of money on a fixed interval through SIP, you keep investing in it irrespective of the market situation. SIP mutual funds will ensure that you will buy lesser units when the markets are bullish and more units when the market shows bearish trends. Over long periods of time, this averages out the cost of purchasing and deals with market volatility.
With a standard SIP starting at a nominal amount, usually below Rs.1,000, you can easily get started with investments without much financial strain. One can also opt for monthly best SIP plans.
SIPs are automated; accordingly, investors do not have to remember to set aside money for investments. Since everyone is not an expert at managing money, this ensures the steady growth of your investments.
SIPs are low-risk instruments considering you have the option to start with a nominal amount. This is ideal for investors who are just starting out. To make calculated investments investors need to know about the best SIP mutual funds in India and the features and benefits they offer.
You can stop your SIP investment at any time without needing approval from the fund manager. You can also pause your investment with a SIP Stop request in case of a financial crunch and resume your investment again whenever it is convenient. Funds can also be withdrawn at any time with a click and you can use them for emergency times. When investing via SIPS, one should always read about the best SIP investment plans before making any decisions.
SIPs could be ideal for growing your wealth for the future one step at a time. Choose the best SIP plans to take advantage of regular investments with reduced risks against market fluctuations. In addition, it is an easy and flexible way to grow your wealth without cost barriers.
Beginner and seasoned investors prefer SIP because it brings discipline to their financial journey. So, if you’re planning to make SIP investments, start doing so with Navi Mutual Fund. With Navi Mutual Fund, you can invest in a wide range of low-cost funds with as low as Rs.10!
*Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Yes. SIPs are suitable for new investors as they do not have to arrange for a large sum of money to get started in their investment journey.
All mutual funds come with various levels of risk; thus, the risks associated with a SIP will depend on the type of mutual fund. However, an SIP itself somewhat reduces the risk of market fluctuations owing to its rupee cost averaging feature.
There is no right time to start investing in an SIP. This is because existing market levels do not impact the long-term performance of an SIP investment.
An SIP instalment will stop if there is no balance in your bank account. A single missed payment does not lead to the cancellation of the SIP or any penalties. However, failure to pay for three consecutive months may lead to cancellation.
For most fund houses, six months is the minimum period of investment for SIPs. However, such short-term duration may lead to low returns due to market conditions. Investors might want to consider investing in one of the best SIP plans for as long as possible to get maximum returns.
Yes, SIPs are tax-saving instruments. Under Section 80C, you can claim a tax deduction of up to Rs. 1.5 lakh.
The minimum SIP amount you can invest is Rs. 100. There’s no cap on the maximum amount to invest in SIPs. However, for tax savings, the maximum amount eligible for investment is Rs. 1.5 lakh only.
Before deciding on the SIP most suitable for you, you need to understand your financial position. If you are a salaried employee, then you should go for monthly SIP as you get your salary on predetermined dates, which helps you invest regularly. You may consider investing through a weekly SIP if you want to purchase fund units more frequently and optimise the cost of purchase of fund units to the fullest.
No, gains earned on SIP investments are not tax free unless the profit earned is less than Rs.1 lakh. For equity investments, LTCG (Long-term Capital Gains) are taxed at 10% while STCG (Short-term Capital Gains)are taxed at 15%. For debt investments, STCGs are taxed as per your tax slab, whereas LTCGs are taxed at 20% with indexation.
Yes, You can choose to redeem your SIP investment (except ELSS funds which come with a lock-in period of 3 years) to meet immediate needs or to achieve the financial goal for which you invested in the first place.
No, there is no assured or guaranteed returns for SIP. It is just an investment option that allows you to invest across a number of mutual funds. Also, a number of best return SIP plans are available which investors can consider investing in.
Step 1: Arrange important documents like PAN, Aadhaar card etc.
Step 2: Complete KYC
Step 3: Register /Sign Up at AMC website
Step 4: Enter (investment amount, choose scheme plan and option)
Step 5: Choose payment mode and date
Step 6: Fill all the details and submit at the AMC website
1. Less Control
2. Average Returns
3. Lack of Flexibility
4. Subject to Market Volatility
5. Portfolio Underperformance
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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