Systematic Investment Plans (SIPs) have become one of the most popular investment vehicles in India, providing an efficient method of wealth creation. We are providing you with the best top 10 SIP Investment Plans in India through an SIP investment plan, investors can regularly put away fixed amounts into mutual funds; making SIPs an accessible way into equity markets. We will explore some of India’s leading SIP investment plans as well as address frequently asked questions and outline its benefits in this comprehensive guide.
SIP Investment Plans
Systematic Investment Plans (SIPs) enable investors to make regular, disciplined investments into mutual funds at regular intervals (weekly, monthly or quarterly). SIPs help establish disciplined savings habits while taking advantage of rupee cost averaging and compounding. SIPs are especially suited for long-term wealth creation objectives such as retirement planning, children’s education or purchasing a house.
Why Invest in SIPs?
- Rupee Cost Averaging: SIPs help minimize market volatility’s effects by gradually spreading out your purchase prices over time. When prices decline, more units for equal money are purchased; when markets rebound more units for equal money are bought. By spreading out purchases over time and spreading out costs evenly over time, this method helps lower overall unit costs.
- Power of compounding: SIPs benefit from compounding, in which any returns generated on investments are reinvested to generate additional returns. As soon as you start investing, the more time your money has to grow.
- Disciplined Investment Approach: SIPs enable investors to develop a disciplined investing approach. By contributing an automatic amount each month, SIPs help investors form the habit of saving over time even with modest contributions.
- Affordable Solutions: A SIP can be started for as little as Rs500 monthly. This makes SIPs accessible to investors who do not have large sums to invest upfront.
- Flexibility: SIPs provide unparalleled flexibility in terms of investment amount, frequency, and duration. You can alter or pause your SIP without incurring penalties for doing so.
Top 10 SIP Investment Plans in India
1. Axis Bluechip Fund
Axis Bluechip Fund is an aggressive large-cap fund that invests in well-established companies with proven track records. Over time, this fund has proven itself an attractive choice for SIP investors seeking reliable returns with less risk. Focused on high-quality stocks with significant growth potential and investing only in quality stocks with strong growth potential – Axis Bluechip Fund delivers steady returns with less risk.
Key Features:
- Minimum SIP Investment: ₹ 500
- Fund Type: Large-cap
- Returns (5 years): 15% CAGR
2. Mirae Asset Emerging Bluechip Fund
Mirae Asset Emerging Bluechip Fund This fund offers a balanced approach between large-cap and mid-cap funds, providing both stability and growth potential. Renowned for its consistent performance, Mirae Asset Emerging Bluechip Fund can be considered suitable for investors with moderate risk appetite who desire long-term growth potential.
Key Features:
- Minimum SIP Investment: ₹ 1000
- Fund Type: Large and Mid-Cap
- Returns (5 Years): 18% CAGR
3. HDFC Top 100 Fund
The HDFC Top 100 Fund is a large-cap mutual fund that invests in the top 100 companies by market capitalization and adopts a conservative investment approach, selecting only stocks with strong fundamentals for investment. It is suitable for those seeking stability and steady return.
Key Features:
- Minimum SIP Investment: ₹ 500
- Fund Type: Large Cap
- Returns (5 years): 12% Annualized Returns
4. SBI Small Cap Fund
SBI Small Cap Fund is known for its potential to deliver high returns by investing in small-cap companies with strong growth potential, though this comes with greater risk due to small-cap stocks’ inherent volatility. As such, this fund is best suited for investors with an elevated risk tolerance and long-term investment horizon.
Key Features:
- Minimum SIP Investment: Rs 500
- Fund Type: Small-cap
- Returns (5 years): 21% CAGR
5. ICICI Prudential Bluechip Fund
The ICICI Prudential Bluechip Fund is another top-performing large-cap fund focused on blue-chip investments, providing consistent long-term returns through a conservative approach.
Key Features:
- Minimum SIP Investment Required = Rs 100.
- Fund Type: Large-cap Fund (Class I)
- Investment Returns (5 Years): 13 Percent Compound Annual Growth.
6. Kotak Standard Multicap Fund
Kotak Standard Multicap Fund offers diversification across large, mid, and small-cap stocks to maximize potential returns. The fund has proven its ability to deliver consistent returns easily for investors with moderate risk appetites.
Key Features:
- Minimum SIP Investment Required: Rs 1,000
- Fund Type: Multicap Wiser
- Returns (5 years): 15% CAGR
7. Nippon India Small Cap Fund
This fund specializes in investing in small-cap companies, with the potential for high returns but greater volatility and risk. Nippon India Small Cap Fund is ideal for aggressive investors looking to capitalize on emerging companies’ growth potential.
Key Features:
- Minimum SIP Investment: Rs 100
- Fund Type: Small-cap
- Returns (5 Years): 22% CAGR
8. Aditya Birla Sun Life Frontline Equity Fund
Aditya Birla Sun Life Frontline Equity Fund is a large-cap fund that invests primarily in blue-chip companies with strong growth potential, boasting a well-diversified portfolio across sectors that has consistently delivered good returns over time. This fund is suitable for investors seeking stable long-term growth with minimal risk.
Key Features:
- SIP Investment Minimum: Rs 1,000
- Fund Type: Large Cap Funds
- Returns (5-Year CAGR) = 13%
9. DSP Midcap Fund
DSP Midcap Fund This fund specializes in mid-cap stocks, which represent companies with strong growth potential yet may not be as stable as large-cap companies. This fund is ideal for investors willing to take on greater risks in exchange for higher returns and has established itself as an impressive performer within this niche category.
Key Features:
- Minimum SIP investments start from: Rs 500.
- Fund Type: Mid-Cap Fund typically
- Return: Approximately 17% compound annual returns.
10. L&T Emerging Businesses Fund
L&T Emerging Businesses Fund is a small-cap mutual fund designed to invest in emerging companies with the potential for high growth. Though small-cap funds may be riskier investments, they offer significant returns over long term. This fund is best suited for investors who are comfortable taking higher risks over an extended period.
Key Features:
- SIP Minimum Investment: Rs 500
- Fund Type: Small Cap Fund
- Returns (5 Years): 20% CAGR
These SIP plans provide investors with a range of choices across different market capitalizations, enabling them to select funds that suit their risk appetite and financial objectives. From stability to growth and high returns – there’s sure to be something suitable.
How Can I Select an Appropriate SIP Plan?
Consider these factors when choosing a SIP plan:
- Your Investment Horizon: Your investment horizon should match the type of fund you select. For short-term goals, such as short-term financial goals or emergency situations, debt or hybrid funds might be appropriate; but for longer-term plans, equity funds such as large-cap or multi-cap funds might be more suitable.
- Risk Appetite: Prior to choosing an SIP plan, assess your risk appetite. Large-cap funds tend to be less risky than mid- or small-cap funds; if you prefer higher risks, however, smaller or mid-cap funds might offer higher returns.
- Fund Performance: Examine the fund’s historical performance over at least five years to gauge its reliability as an investment tool. A consistent track record across market cycles is an indicator of quality investment decisions.
- Experience of Fund Manager: Expertise and track record are two essential ingredients in selecting funds with successful management teams. Opt for funds with experienced, renowned managers as a way to enhance performance.
- Expense Ratio: An expense ratio refers to the annual fee charged by your fund manager for managing your investments, with lower expense ratios potentially improving long-term returns.
Frequently Asked Questions (FAQs):
Q1. What is the minimum amount required to open an SIP account?
A: Starting a SIP requires a minimum monthly investment of Rs500 in most funds, making it accessible for most investors.
Q2. Can I increase or decrease my SIP amount?
A: Yes, your SIP amount can increase or decrease as necessary to suit your financial circumstances. Some platforms also provide top-up SIP facilities whereby your annual investment amount increases by a fixed percentage annually.
Q3. Are SIP investments safe?
A: SIPs may provide rupee cost averaging and may help to mitigate market volatility; however, they are not risk-free investments. Risk levels depend on which mutual fund type is selected – equity funds typically carry greater market risks while debt funds tend to be safer options.
Q4. Can I withdraw my SIP investments at any time?
A: Yes, SIP investments may be withdrawn at any time; however, to maximize returns it is advisable to stay invested for the long term and remain invested as long as possible. Some funds may impose an exit load fee if withdrawn before an agreed-upon period has elapsed.
Q5. How Are SIP Investments Taxed?
A: Equity funds held for at least one year may be subject to long-term capital gains tax of 10% for any gains exceeding Rs1 lakh during any given financial year, with short-term gains (investments held less than one year) taxed at 15%; short-term gains on investments held less than one year are taxed at 15%, whereas debt funds have different tax implications: short-term gains are subject to your income tax slab while long-term gains with indexation benefits subject to taxation rates of 20% with indexation benefits applied on.
Q6. What is the difference between an SIP and lumpsum investments?
A: SIPs involve investing a fixed amount at regular intervals while lumpsum investments involve making one large investment at once. SIPs tend to be lower-risk investments because their purchase prices are spread out more evenly; making them ideal for volatile markets. Lump sum investments may offer higher returns but carry greater risk.
Conclusion
SIP investment plans in India offer a systematic and flexible way to build wealth over time. By selecting funds carefully to meet your financial goals and risk profile, SIPs can help you meet long-term financial objectives. Below are some of the top SIP options in India that cover different risk profiles and investment horizons – remember, consistent investing requires patience!