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Best SIP Mutual Funds
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Best SIP Mutual Funds

Introduction

Pratik was working in the government sector, and he used to keep his savings in his savings account because he was not aware of the SIP investment. When one of his friends, Mukesh, heard about this, he suggested Pratik invest in SIP. Pratik was not convinced with his words, but when the pandemic hit Mukesh’s health, he could not earn much. Still, because he had SIP, he withdrew money from his SIP and stopped monthly investment in SIP for a few months because, if you have an emergency and don’t have enough money to invest, you can skip a few months of SIP payments. Seeing all this, Pratik also started investing in a sip account.

Best SIP Mutual Funds

What is Systematic Investment Plan (SIP)?

SIP stands for Systematic Investment Plan, and it is a method of investing a set amount in a mutual fund plan at regular intervals. You could, for example, put Rs 1,000 every month in a mutual fund. An essential feature of a SIP is that it is simple to administer; your money will be automatically deducted from your bank account each month and invested in a mutual fund scheme of your choice. There is no need to time the market when you use a SIP for your investing requirements. There’s also a systematic approach to investing.

Best SIP Plans to Invest 

Fund Name Monthly Investment in Rs. One year Return in (%) 3 Years Return in (%) 5 years Return in (%)
Franklin India Focused  6000 80.39  22.68 15.78
DSP Equity Fund 6000 31.90 14.39 14.36
Nippon India large Cap Fund 6000 69.69 15.55 14.48
Motilal Oswal Focused 25 Fund 6000 40.77 20.01 14.34
TATA India Consumer Fund 6000 49.09 26.81 19.06
Axis Bluechip Fund  6000 52.52 20.79 18.16
ICICI Prudential Bluechip Fund 6000 59.24 19.41 15.69
HDFC Balanced Advantage Fund 6000 55.65 14.39 13.47
Axis Focused 25 Fund 6000 61.91 20.94 19.03

Disclaimer – Changes in tax laws may affect the tax benefit. *Standard Terms and Conditions apply  

Why invest in a SIP?

The sip benefits are discussed below:

The initial investment is little.

Systematic Investment Plan (SIP) is a cost-effective approach to invest each month without breaking the bank. With the sip account step-up function, you can increase your monthly investment as your income rises. Buyers can top up their SIPs with mutual fund companies constantly. So, even if you start with Rs. 500 or Rs. 1,500 per month, you may gradually increase your investment over time. This method can assist you in achieving your sip mutual fund investment objectives more quickly.

Compounding has a positive effect on you.

Your monthly SIP investment yields a return when you invest using a SIP plan. Those profits are added to your original investment and re-invested! As a result, your monthly SIP and the profits you make are exposed to a compounding effect over time, ensuring exponential growth.

You have the option to terminate the SIP at any moment

You can freely opt out of the SIP plan if you do not wish to continue the plan. This has a significant advantage over recurring deposits (RD), which generally impose a fee if you choose to cancel them. You have the choice of receiving a refund or continuing to invest in the mutual fund after discontinuing your regular sip investment.

Reduces Mutual Fund Units’ Average Cost

Continuing on from the previous point, a sip account can also help you save money by lowering the average cost of mutual fund units. The fund’s NAV is low when markets are falling and high when markets are rising. When you spend a fixed amount over time through a SIP, the average cost of purchasing units tends to be lower in the long run than while you make a lump sum investment when the markets are high.

Absolute Transparency

In India, the mutual fund business has risen by leaps and bounds in recent years. AMFI and SEBI have adopted various strict procedures to protect the interests of investors, which every mutual fund scheme and AMC must now follow. This has made the mutual fund sector open and safe for individuals who are just starting their investment journey through SIPs.

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