Last Updated on 03/01/2024 by Deepak Singla
If you are thinking to invest in SIP plans, then you need to find out which are the best SIP plans currently available in 2020. You require all the detailed information about Best Sip Mutual funds so that you can invest intelligently and receive good benefits from it in the future. Investment should always be done very carefully to avoid unwanted circumstances later. But before going into details, here we should know about the SIP first. So, without wasting any time, let’s get started.
In the article
What is SIP?
SIP stands for Systematic Investment Plan wherein you need to invest a fixed amount of money (premium) periodically in Mutual funds of your choice. The premium will be deducted from your Savings Account every month (mostly) and then it will be deposited in your mutual fund scheme.
One can invest regularly in his/her preferred mutual fund schemes. The difference between other investment plans and SIP is that while in other plans you need to deposit the entire amount in one go, in SIP a fixed amount of money is deducted from one’s savings account every month and it is transferred to the mutual fund in which the person chooses to invest.
Mutual funds are a type of investment wherein a fund house invests your and other investors’ money into some securities. These will in turn give you returns and help in wealth growth. So, there are two ways of investing in mutual funds: SIPs and Lumpsum investment.
SIP is generally said to be the better option because it is safer, not much volatile, affordable, and beneficial in the long run. However, there are several SIPs available in the market. Every fund claims to be the best SIP mutual fund in India but that can’t be true.
Top 21 Best SIP Plans to Invest in India 2024
Here is a list of best sip plans to invest in 2020 for 5 years and 3 years with their last 3 years and 5 years returns. Hopefully, you will find the Best SIP Mutual fund that suits your needs. So, without any further ado, let’s dive straight into it:
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Best Large Cap SIP Funds
Mirae Asset Large Cap Fund (Growth)
Mirae Asset Large Cap Fund was launched back in January 2013. Ever since then, it has provided consistent performance to prove that it is one of the best SIP plans in India. The historical performance and track record of the Mirae Asset Large Cap fund have been fairly good.
The fund follows the benchmark index Nifty 100 TRI and is suitable for long term investments with a minimum tenure of 5 years.
| NAV (INR) | 57.68 |
| 1-year return (%) | 5.36% |
| 3-year return (%) | 6.43% |
| 5-year return (%) | 11.16% |
| 2019 return (%) | |
| Fund Size (AUM) | INR 18,450 Cr |
| Age | 7 years 9 months |
| Exit Load | 1% |
| Doubled in | 4 years 7 months |
| Risk | Moderately High |
Axis Blue Chip Fund
Axis Bluechip Fund is the perfect fund to achieve long term wealth growth. This large-cap equity fund has managed to deliver an annualized return of 11.43% consistently. It invests your money in a diverse portfolio including equity and related securities. Launched back on 5th October 2010, the Axis Bluechip Fund has become one of the best SIP mutual funds in India today.
| NAV (INR) | 35.24 |
| 1-year return (%) | 4.94 |
| 3-year return (%) | 11.02 |
| 5-year return (%) | 11.96 |
| 2019 return (%) | 20.47 |
| Fund Size (AUM) | INR 16,763 cr. |
| Age | 7 yrs 9m |
| Expense Ratio | 0.56% |
| Doubled in | 4 yrs 7 m |
ICICI Prudential Bluechip Fund (Growth)
ICICI Prudential Bluechip Fund is a Large Cap Equity fund that has managed to produce an annualized return of 12.43% over the last 12 years. This is a large-cap fund that primarily invests in equity and related securities of large-cap organizations.
The minimum SIP investment required for this plan is INR 1000 only. You can increase this amount by the multiples by 100. Launched back in 2008, the ICICI Prudential Bluechip Fund has a fund size of INR 24,246 crs today. This is one of the best SIP mutual funds meant to serve long term investors with a minimum investment horizon of 5 to 7 years.
| NAV (INR) | 45.73 |
| 1-year return (%) | 1.33 |
| 3-year return (%) | 4.43 |
| 5-year return (%) | 8.85 |
| 2019 return (%) | 9.39 |
| Fund Size (AUM) | INR 23,423 cr. |
| Age | 7 yrs 9 m |
| Expense Ratio | 1.09% |
| Doubled in | 6 yrs 5 m |
SBI Bluechip Fund (Regular Growth)
SBI Bluechip Fund (Growth) is a type of large-cap equity fund and is well-known as one of the best SIP plans. It has delivered an annualized return of 9.96% for the last 14 years. It provides you with an opportunity to grow your wealth over the long term.
This is a moderately high-risk fund with an AUM of INR 22,604 crs today. You need to stay invested in it with a minimum tenure of 5 to 7 years to receive the best results.
| NAV (INR) | 40.32 |
| 1-year return (%) | -0.01 |
| 3-year return (%) | 2.89 |
| 5-year return (%) | 7.11 |
| 2019 return (%) | 11.41 |
| Fund Size (AUM) | INR 22,058 crs |
| Age | 14 yrs 9 m |
| Expense Ratio | 1.69% |
| Money Doubled in | 6 yrs 5 m |
Aditya Birla Sun Life Frontline Equity Fund Growth
Aditya Birla Sun Life Frontline Equity Fund was launched back in 2002. Today it has grown to amass an AUM of INR 17,802 crs. This large-cap equity fund has been delivering an annualized return of 18.72% over the last 18 years.
9.48% of this fund’s allocation goes towards equity. You can start investing in this SIP fund with an amount of INR 0.
| NAV (INR) | 240.78 |
| 1-year return (%) | 1.84 |
| 3-year return (%) | 2.44 |
| 5-year return (%) | 7.5 |
| 2019 return (%) | 7.38 |
| Fund Size (AUM) | INR 17,191 crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 1.0% |
| Money Doubled in | 6 yrs 5 m |
Best Mid-Cap SIP Plans in India
Kotak Emerging Equity Fund
Kotak Emerging Equity Fund is one of the best SIP plans in India and has provided an annualized return of 11.09% in the last 13 years. Launched on 30th March 2007, this fund has become a well-reputed investment option.
Today, its fund size is at INR 7,300 crs and it charges 1.86% as the expense ratio. The minimum amount you need to start this SIP plan is INR 1000.
| NAV (INR) | 45.6 |
| 1-year return (%) | 10.36% |
| 3-year return (%) | 3.72% |
| 5-year return (%) | 10.79% |
| 2019 return (%) | 8.92% |
| Fund Size (AUM) | INR 7535 crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 0.62% |
| Doubled in | 5 yrs 11 m |
Nippon India Growth Fund
Nippon India Growth Fund remains to be one of the oldest investment plans in India. This SIP plan was launched in 1995 and has been providing its customers with consistent performance ever since.
You will achieve long-term capital growth through this fund and it is recommended to stay invested for at least 10 years. Managed by Nippon Life India Asset Management Ltd., this fund continues to be one of the top SIP plans in India.
| NAV (INR) | 1228.81 |
| 1-year return (%) | 8.2 |
| 3-year return (%) | 2.46 |
| 5-year return (%) | 7.9 |
| 2019 return (%) | 6.61 |
| Fund Size (AUM) | INR 7,040crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 1.23% |
| Doubled in | 6 yrs 4 m |
L&T Midcap Fund (Growth)
L&T Midcap Fund was launched on 9th August 2004 and has tried its best since to help you with capital growth. This fund invests primarily in mid-cap stocks. It is a high-risk fund but has an excellent consistency and track record for the last 16 years.
It is recommended that you stay invested in this fund for at least 10 years to receive the best returns. L&T Midcap Fund’s benchmark index is the IISL NIFTY Midcap 100 TR INR.
| NAV (INR) | 136.31 |
| 1-year return (%) | 6.29 |
| 3-year return (%) | -0.87 |
| 5-year return (%) | 8.67 |
| 2019 return (%) | -0.11 |
| Fund Size (AUM) | INR 5,928 crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 0.74% |
| Doubled in | 6 yrs |
Franklin India Prima Fund (Growth)
Franklin India Prima Fund was launched back in 1993. So, that makes it pretty old in the SIP industry. This fund is one of the best funds for long term investments with a minimum tenure of 5 to 7 years. It follows the IISL Nifty Midcap 150 TR INR as its benchmark index.
| NAV (INR) | 940.76 |
| 1-year return (%) | -0.16 |
| 3-year return (%) | -0.05 |
| 5-year return (%) | 6.89 |
| 2019 return (%) | 3.39 |
| Fund Size (AUM) | INR 6,367 crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 1.08% |
| Doubled in | 6 yrs 2 m |
HDFC Mid-Cap Opportunities Fund (Growth)
HDFC Mid-Cap Opportunities Fund was launched on 25th June 2007. It is a top-rated SIP plan in India with its annualized returns at 13.49% for the last 13 years. This long-term mid-cap equity fund will provide you with long-term wealth growth opportunities. Its benchmark index IISL NIFTY Midcap 100 TR INR.
| NAV (INR) | 54.00 |
| 1-year return (%) | 4.56 |
| 3-year return (%) | -0.52 |
| 5-year return (%) | 7.12 |
| 2019 return (%) | 0.11 |
| Fund Size (AUM) | INR 22,084 crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 1.11% |
| Doubled in | 6 yrs 3 m |
Best Tax-Saving SIPs in India
Mirae Asset Tax Saver Fund
Mirae Asset Tax Saver Fund is one of the best SIP mutual funds in India that will help you to save on your taxes as well. It has an annualized return of 15.28% and is managed by Mirae Asset Global Inv (India) Pvt. Ltd. Its benchmark index is IISL Nifty 200 TR INR and you can start this SIP investment with just INR 500.
| NAV (INR) | 19.83 |
| 1-year return (%) | 10.74 |
| 3-year return (%) | 7.68 |
| 5-year return (%) | N/A |
| 2019 return (%) | 13.98 |
| Fund Size (AUM) | INR 4,270 crs |
| Age | 4 yrs 11 m |
| Expense Ratio | 0.36% |
| Doubled in | 4 yrs 3 m |
Motilal Oswal Long Term Equity Fund
Motilal Oswal Long Term Equity Fund will help you grow your wealth and save on your taxes at the same time. It was launched on 21st Jan 2015 which makes it a younger fund when compared to other funds in this list. However, it has still managed to deliver an annualized return of 9.62% for the last 5 years.
| NAV (INR) | 16.96 |
| 1-year return (%) | -5.38 |
| 3-year return (%) | -0.29 |
| 5-year return (%) | 8.4 |
| 2019 return (%) | 12.6 |
| Fund Size (AUM) | INR 1,553 crs |
| Age | 5 yrs 9 m |
| Expense Ratio | 0.71% |
| Doubled in | NA |
Aditya Birla Sun Life Tax Relief 96 Fund
Aditya Birla Sun Life Tax Relief 96 is an open-ended equity scheme that helps you to save taxes along with growing your wealth. It has provided an annualized return of 9.7% for the last 12 years. The main objective of this fund is to grow your wealth over a long term. It invests in a diverse portfolio to maximize your returns.
| NAV (INR) | 32.18 |
| 1-year return (%) | 4.48 |
| 3-year return (%) | 2.31 |
| 5-year return (%) | 8.05 |
| 2019 return (%) | 4.44 |
| Fund Size (AUM) | INR 11,123 crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 0.94% |
| Doubled in | 6 yrs 2 m |
ICICI Prudential Long Term Tax Saving Equity Fund
ICICI Prudential Long Term Equity Fund was launched on 19th August 1999. This 21 years old fund has delivered an annualized return of 18.6%. This fund invests mainly in equity and equity-related securities. The minimum SIP amount required for this investment is INR 500 only.
| NAV (INR) | 370.26 |
| 1-year return (%) | 0.01 |
| 3-year return (%) | 4.01 |
| 5-year return (%) | 6.26 |
| 2019 return (%) | 14.06 |
| Fund Size (AUM) | INR 6,328 crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 1.27% |
| Doubled in | 6 yrs 5 m |
Invesco India Tax Plan (Growth)
Invesco India Tax Plan is a tax saving equity fund that delivers an annualized return of 13.12% for the last 13 years. It will allow you to grow your wealth and save on your taxes at the same time. Launched on 29th December 2006, this fund has a total AUM of INR 1,112 cr. The minimum amount you need to start investing in this fund is INR 500. It follows the S&P BSE 200 India TR INR as its benchmark index.
| NAV (INR) | 54.86 |
| 1-year return (%) | 6.28 |
| 3-year return (%) | 5.96 |
| 5-year return (%) | 8.91 |
| 2019 return (%) | 9.08 |
| Fund Size (AUM) | INR 1,134 crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 1% |
| Doubled in | 6 yrs 1 m |
Axis Long Term Equity Fund (Growth)
Axis Long Term Equity Fund is a tax saving fund that primarily invests in equity and related securities. It has delivered an annualized return of 15.54% for the period of the last 10 years which makes it one of the best SIP plans. It allows you to grow your wealth over the long term.
Launched back in 2009, this fund today has an AUM of INR 21,904 cr. This is a moderately high-risk fund. The minimum SIP amount required for this investment is INR 500.
| NAV (INR) | 47.68 |
| 1-year return (%) | -0.68 |
| 3-year return (%) | 6.2 |
| 5-year return (%) | 8.84 |
| 2019 return (%) | 14.63 |
| Fund Size (AUM) | INR 21,836 crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 0.89% |
| Doubled in | 6 yrs |
Best Index Funds for SIP Investment in India
UTI Nifty Index Fund (Growth)
UTI Nifty Index Fund is a top-notch SIP plan in India. It has delivered an annualized return of 10.51% for the last 20 years since its launch in 2000. It primarily invests in equity securities and the minimum SIP investment for this fund is INR 500. This fund follows the IISL Nifty 50 TR INR as its benchmark index. Undoubtedly, this is one of the best SIP plans to invest in.
| NAV (INR) | 78.64 |
| 1-year return (%) | 2.78 |
| 3-year return (%) | 6.23 |
| 5-year return (%) | 8.58 |
| 2019 return (%) | 12.75 |
| Fund Size (AUM) | INR 2,711 crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 0.1% |
| Doubled in | 6 yrs 7 m |
HDFC Index Nifty 50 Fund (Growth)
HDFC Index Nifty 50 Fund was launched on 17th July 2002 and has delivered an annualized return of 13.78% over the last 18 years. The minimum SIP amount for this investment is INR 1000 and it is recommended to stay invested for at least 5 years. Its benchmark index is IISL Nifty 50 TR INR.
| NAV (INR) | 109.10 |
| 1-year return (%) | 2.42 |
| 3-year return (%) | 6.05 |
| 5-year return (%) | 8.4 |
| 2019 return (%) | 12.48 |
| Fund Size (AUM) | INR 1,882 crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 0.1% |
| Doubled in | 6 yrs 7 m |
ICICI Prudential Sensex Index Fund (Growth)
ICICI Prudential Sensex Index Fund is a type of Index fund and was launched in 2017. The total AUM of this fund INR 137 cr and it is a moderately high risk. It has provided an annualized return of 8.36% for the last 3 years. It primarily invests in equity and related securities to provide you with the maximum returns.
| NAV (INR) | 12.81 |
| 1-year return (%) | 4.77 |
| 3-year return (%) | 8.35 |
| 5-year return (%) | NA |
| 2019 return (%) | 14.06 |
| Fund Size (AUM) | INR 146 crs |
| Age | 3 yrs 1 m |
| Expense Ratio | 0.3% |
| Doubled in | NA |
HDFC Index Sensex Fund (Growth)
HDFC Index Sensex Fund delivers an annualized return of 14.19% over the last 18 years. Launched back in 2002, this fund now has an AUM of INR 1454 crs. Hence, it has earned its place in the list of best SIP plans in India. This high-risk fund is managed by the HDFC Asset Management Company Ltd. It tries to generate returns that match the S&P BSE SENSEX TR INR.
| NAV (INR) | 363.08 |
| 1-year return (%) | 3.88 |
| 3-year return (%) | 8.3 |
| 5-year return (%) | 9.17 |
| 2019 return (%) | 14.54 |
| Fund Size (AUM) | INR 1496 crs |
| Age | 7 yrs 9 m |
| Expense Ratio | 0.1% |
| Doubled in | 6 yrs 7 m |
Nippon India Index Fund Sensex Plan (Growth)
Nippon India Index Fund Sensex Plan tries to generate returns that match its benchmark index, i.e. S&P BSE SENSEX TR INR. This fund is mainly designed for investors with an investment horizon of 5 to 7 years. Also, you can expect some volatility in the case of short term investments.
The minimum SIP amount you need to start this plan is INR 1000. Launched in 2010, this fund today has a fund size of INR 96 crores.
| NAV (INR) | 20.14 |
| 1-year return (%) | 4.14 |
| 3-year return (%) | 7.95 |
| 5-year return (%) | 8.47 |
| 2019 return (%) | 13.67 |
| Fund Size (AUM) | INR 98 crs |
| Age | 7 yrs 9 m |
| Exit Load | 0.25% |
| Doubled in | 6 yrs 7 m |
Disclaimer: Mutual Funds are subject to market risk. Their interest rates could change anytime so choose accordingly. The given list is just a recommendation from our side.
After knowing which the best SIP plans for 5 years and 3 years are, to invest in 2020, you must be thinking about how to choose the best one among these plans. So, here is the solution for you. The following are the steps to judge which the best SIP plans are, suits your requirements.
How to Choose the Best SIP Plans for SIP investment?
In this online era, you can get every information on the internet. So, you can check out the features of various mutual funds online and compare them too. There are certain points you must keep in mind while going through the Best SIP mutual funds.
1. SIP tenure
It is recommended that you keep a reference period of 5 years and then check how a fund has performed in the market. Also, check out the risk, returns, and tax benefits offered in various durations of the SIP.
2. Fund House
You must check out the reputation and past performance of a fund house before finalizing a plan. This will give you an idea of whether the fund house handles the market fluctuations properly or not. This point is extremely important as some fund houses can’t bear the market lows and then you might incur a massive loss.
3. AUM (Asset under Management)
You can consider the INR 500Cr AUM as a good benchmark. Funds having this mark and those that are above this mark can be considered to be appropriate while deciding the Best SIP fund. But, this is not a thumb rule. The assets below this mark might not be bad. However, there is a chance that those below this mark might not perform as well as the funds above this asset mark.
How does SIP work?
SIP instils the practice of regular savings in a person. After you purchase a plan, then the premium amount of the plan will be automatically deducted from your bank account every month. This will continue for the entire tenure of your mutual fund.
Based on the NAV of your mutual fund, the units will be allocated to you. Additional units will be added as well based on the market rate of your mutual fund. So, with each investment, the reinvested amount becomes larger and hence, the return on it increases too.
You don’t need to be a stock market expert to invest in SIP Plans. The units will be purchased at separate rates and more units shall be bought when the market is low and vice versa.
Also, you will have the entitlement to choose when to receive the investment returns: periodically or at the end of the SIP.
For example, if you invest INR 1 lakh in a mutual fund, then you can invest a lump sum or via SIP. If you choose the SIP option, then you will have to decide a premium amount, suppose INR 500. Now, INR 500 will be deducted from your account on a fixed date of every month and this amount will be credited towards your mutual fund. This premium deduction will continue until the end of your investment tenure.
Types of SIP
SIP has gained immense popularity because of its financial discipline, safety, and security, convenience. There are generally four kinds of SIP available in India.
Given below are the types of Systematic Investment Plans (SIPs):
1. Top-up SIP
A top-up SIP is a type of SIP that will allow you to increase your investment in a periodic manner. You will have the flexibility to invest a higher amount later if you want to. This way you will be able to make the most out of your investments as you have the freedom to invest in the best performing funds regularly.
2. Flexible SIP
Flexible SIP is a type of SIP wherein you will have the flexibility to invest whichever amount you feel like. This means that you can increase the amount of investment if your cash flow increases and also decrease it if the cash flow decreases.
3. Perpetual SIP
Perpetual SIP plan is a type of SIP that allows you to alter the end date of your investment. You can carry on your SIP without having an end date. Generally, SIPs have an end date of 1 yr, 3 yrs, or 5 yrs. With a Perpetual SIP, you will have the freedom to withdraw your invested amount whenever you want to as per your financial needs.
4. Trigger SIP
Trigger SIP is a type of SIP that allows you to set the NAV, index level, SIP start date, and other things related to your investment. This is the best type of SIP for investors who are just starting and have limited information about the market. However, a trigger SIP may raise speculations, so it is not quite recommended.
Benefits of SIP investment
If you do not have the prior financial knowledge and are a beginner at investing, then SIP is perhaps the best way to start. A SIP involves the premium getting deducted from your bank account automatically on a specific day of the month. This premium is credited automatically to your mutual fund.
So, the experience will be hassle-free for you. You also become financially disciplined due to periodicity.
1. Convenience
By now, it must be clear to you that SIP keeps you relaxed about your investments. You just need to submit an application form and then initiate the auto-debit process of SIP premiums.
2. Rupee Cost Averaging
Your monthly premium will be constant for a long period. Since the premium remains fixed in SIP, so the value of each unit is averaged out. So, you will buy more units when the market is down and fewer units when the market is high. This way you can take advantage of the volatility in the market.
3. Power of Compounding
SIP instills financial discipline in you and this way you can grow your investment. As the premium deposition is automated, so your investment increases unlike the case in lumpsum. Your small monthly premiums will one day grow to become a large corpus due to the reinvestments and returns compounded over a long term.
For example, if you pay a premium of INR 1000 every month towards a SIP with an average return rate of 10%, then the total amount will grow to become INR 7,18,259 owing to the compounding effect.
To know more read here: Power of compounding.
4. Higher returns
Mutual funds provide higher returns as compared to Recurring Deposits (RDs), Fixed Deposits (FDs), and other conventional methods.
Top SIP mutual funds in India
Top 10 Best Debt Mutual Funds for 5 years and 3 years
Below is the list of 10 Best debt Mutual funds to invest by SIP
| Sl. No. | Fund Name | 3 yr returns (%) | 5 yr returns (%) |
| 1. | Nippon India Low Duration Fund | 7.19% | 7.55% |
| 2. | UTI-ST Income Fund-Inst | 3.67% | 5.88% |
| 3. | Aditya Birla Sun Life Savings Fund | 7.78% | 8.17% |
| 4. | HDFC Short Term Debt Fund | 8.84% | 8.76% |
| 5. | DSP Credit Rank Fund | 1.59% | 4.77% |
| 6. | UTI Treasury Advantage Fund | 3.51% | 5.47% |
| 7. | L&T Low Duration Fund | 6.31% | 7.7% |
| 8. | Aditya Birla Sun Life Credit Risk | 4.87% | 7.04% |
| 9. | Aditya Birla Sun Life Medium Term Plan | 2.02% | 5.2% |
| 10. | Kotak Dynamic Bond Fund Direct-Growth | 9.73% | 10.66% |
Top 10 Best Equity Mutual Funds SIP plans 5 years and 3 years
Below is the list of 10 Best Equity Mutual Funds to invest by SIP
| Sl. No. | Fund Name | 3 yr returns (%) | 5 yr returns (%) |
| 1. | Mirae Asset Large Cap Fund | 4.44% | 8.37% |
| 2. | Axis Bluechip Fund | 9.39% | 8.78% |
| 3. | ICICI Prudential Bluechip Fund | 2.76% | 6.31% |
| 4. | SBI Bluechip Fund | 1.66% | 5.43% |
| 5. | SBI Magnum Multicap Fund | 1.31% | 6.26% |
| 6. | Aditya Birla Sun Life Frontline Equity Fund | 0.43% | 4.79% |
| 7. | L&T India Value Fund | -2.35% | 5.47% |
| 8. | Mirae Asset Emerging Bluechip Fund | 5.45% | 11.98% |
| 9. | Kotak Standard Multicap Fund | 2.91% | 7.68% |
| 10. | Axis Focused 25 Fund | 5.77% | 8.89% |
When to Invest in an SIP in India?
You can start SIP investments anytime you feel like. However, make sure that you select a plan that suits your long-term financial objectives. Also, the risk associated with the SIP should be minimum according to your needs. Since SIP investments make you financially disciplined, so the sooner you purchase a SIP, the better.
SIP Calculator
A SIP calculator is a calculation tool, that does all your SIP investment calculations for you. You just need to provide some details in this tool such as the amount you can invest every month, the expected yearly return rate, the duration of the SIP. It provides you with the overall estimate of the return. By using the SIP calculator, you can do a comparison between the returns from SIP and other investment plans.
You just need to enter the following details in the SIP Calculator:
- SIP or Lumpsum
- Monthly Investment/ Monthly premium
- Number of Years (Investment Tenure)
- Return rate
There is another kind of calculator also, which is called the reverse SIP calculator. To calculate in this, you have to provide an expected yearly return, SIP duration and the target amount. Overall SIP calculator is a very beneficial tool, which offers you to know about the estimated return that you will earn after the investment time period.
Here are the three most important advantages of using SIP calculator:
- It provides a person with the estimated value of his/her return.
- It guides a person in determining the amount of money he/she wants to invest.
- It provides a person with details about the amount of money he/she invested.
The formula in which SIP calculator does it’s all calculations is the following:
M = P *({[ 1+i ] n-1 } /1 ) * (1+i ).
M= The amount a person receives upon maturity.
P= The amount a person invests at regular intervals.
i= Periodic rate of interest.
n= Number of the investor’s payments.
SIP Investment Vs One-time investment
| Lump-sum investment/ One-time investment | SIP Investment |
| Investors need to pay a lump-sum at once. | Investors have to pay periodic premiums every month. |
| A lump-sum investment makes more money when the market is high. | The SIP investment earns higher returns on your investment when the market is low. |
| Lump-sum investment can lead to a huge loss if the market fluctuates. | SIP investment deals properly with market fluctuations since it makes use of rupee cost averaging. |
How to start investing in Best SIP Plans?
Investing in SIPs involves a simple and convenient procedure and you can also do it from home online. Go through the following steps while investing in SIPs:
1. Investment Goal
Your financial goal should be clear in your mind. You should choose a fund as per your needs and future investment goals.
2. Suitable Plan
There are hundreds of SIPs available in the market. Analyze the plans as per your needs and their past performance. Besides, check if the fund will meet your goals or not and then choose the plan accordingly.
3. KYC
SIP mutual funds need a net-banking account and KYC documentation as well. You can also choose to submit an e-KYC option too and then upload the documents
How much should you invest in a SIP?
When you are saving or investing to achieve a financial goal, then it might not be right to work with rough estimations. Make sure that you make a thorough financial plan and keep real numbers in your calculation.
An organized plan will help you in achieving these goals. The right mutual fund scheme will manage your investment portfolio in a way that works in your favor. In India, you can start investing in SIPs with as low as INR 500. So, investing with a minimum of INR 500 over a fixed tenure will also help you to reach your financial goal.
SIP benefits to save income tax
If you buy an ELSS (Equity Linked Savings Scheme) in SIP mode, then you can avail of the tax benefits. ELSS is a government-approved Best tax saving Mutual funds scheme and you can easily claim the tax benefits under Section 80C of the IT Act, 1861 if you purchase an ELSS via SIP.
Dos and don’ts while investing sip
1. Wrong fund
The first step while investing in a SIP mutual fund is choosing a fund/funds to invest your hard-earned money in. It is recommended that you study and analyze the mutual fund properly before starting the investment. In case you choose a wrong fund that does not go as per your requirements, then your financial goals will be ruined.
2. High Investment
One of the major perks of investing in SIPs is that they allow you to invest in small amounts. Make sure you do not buy such a fund whose premiums might become too costly for you in the future. So, choose such a fund and such a premium amount that would be affordable for you. Otherwise, if you discontinue paying the premiums then you wouldn’t get the returns you aimed at while buying the fund.
3. Investment Tenure
Do not go for a short-term investment while investing in SIP!
The returns you get via a SIP investment depend on the time duration for which you stay invested in the plan. The thumb rule says that the longer the investment term, the higher will be the investment value.
4. Do not set an unrealistic goal
People who are beginners at investing and immature when it comes to financing often set unrealistic goals for themselves. Please do not expect dramatic returns from your investments. Try to keep your expectations limited to average returns only. You can expect around 10% to 20% returns but expecting 50% to 100% is way too unrealistic.
5. Dividend or Growth?
One of the best things about SIPs is that you can switch anytime from dividends to growth and vice versa. In case of dividends, the interest you get is the simple interest on the principal amount. But, if you choose the Growth option, then you will earn based on the principle of compounding (interest is earned on the interest). Many people go for the dividend option overgrowth. But, you can switch between dividend and growth accordingly and achieve your investment goals.
6. Boost Your SIP
You can also have a combination of regular and lump sum investments as this will get you better returns than regular SIPs. Life is all about highs and lows. When you are in a good financial condition, then you can add a lump sum to your SIP under the same portfolio. This will help in boosting your SIP.
FAQs About SIP Plans
Q1. What if I miss a premium of my SIP?
Ans: It’s okay if you miss a SIP payment. Your account won’t be deactivated. Besides, many mutual fund houses do offer the privilege of pausing the payment.
Q2. Is it safe to invest in SIP?
Ans: SIP is one of the safest processes of investment since it allows you to invest a specific amount regularly. SIP provides you with a planned investment approach and develops financial discipline in them.
Q3. What is the minimum amount that I can invest in a SIP?
Ans: You can start a SIP with a minimum of INR 500 per month.
Q4. Do all SIP investments offer tax benefits?
Ans: The investments made via SIP in ELSS offer tax deductions up to a maximum of INR 1.5 lakh under section 80C of the IT Act.
Q5. How to shorten the SIP duration?
Ans: You can send a written application to the fund manager or make an online request. But, it is advisable that the investor should complete paying the premiums for the minimum investment period, i.e. 6 months.
Q6. How to extend the tenure of my SIP?
Ans: You have the option of renewing your investment at the end of your tenure. You will have to fill up the renewal form and then choose the required duration of the investment.
Q7. What is the maximum amount that you can invest in SIP?
Ans: The maximum amount that can be invested in SIP has no limitation.
Q8. Is SIP the right option for long-term financial goals?
Ans: Yes, SIP is one of the best options to build a large corpus that will fulfill your long-term financial goals as it provides higher and stable returns over the long-term.
Q9. How does SIP work?
Ans: SIP involves paying monthly premiums which are then invested in securities that earn returns. However, you can also make weekly, monthly, or quarterly investments as per your preferences.
Q10. Can I buy a SIP online?
Ans: Yes, you can easily do that via the fund’s online website or through a net banking app/ partner website. You just have to fill-up the form, provide the necessary documents, and pay the first premium online, and just like that, you have now started a SIP.
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