What is SIP?
The Systematic Investment Plan (SIP) is an investment option or an investment methodology provided by Mutual Funds that enables investors to make periodic, fixed-interval investments of a fixed amount in mutual fund schemes, such as once a month, instead of a lump-sum investment.
As low as Rs 100 can be paid in SIP installments each month. It is comparable to a recurring deposit in which you make a small or fixed monthly deposit.
These days SIP is becoming more and more popular among Indian Mutual fund investors as it facilitates rupee cost averaging, a.k.a dollar-cost averaging in the western financial world and it is considered a disciplined investment without having to worry about market volatility or timing the market. To conclude, rupee cost averaging through SIP is the most efficient technique to enter the world of investing over the long term.
How To Invest In The Best SIP Plan With Rs. 1000/Month?
Given the small investment, it is important to consider a variety of criteria while choosing the best strategy. Your goals, risk tolerance, investment objective, present financial status, and investment horizon should all be taken into account.
To choose the best SIP plan for just Rs. 1,000 each month, follow these steps:-
- The investment horizon should be sufficient for the power of compounding to work and show increased returns.
- The time frame for investing should be long enough to let the power of compounding work and show higher returns.
- You can consider investing in the stocks of companies that have been performing well such as large cap Funds to reduce risk. As soon as you have an understanding of how the stock market operates, you should begin diversifying your portfolio across companies with diverse market capitalizations.
- Blue-chip stocks may give you the returns you want if you are a beginner. These stocks come from companies that have kept their finances in good shape and shown steady profits.
- You should avoid investing money in small-cap equity funds and penny stocks. Despite the large profits, these investments typically carry a high degree of risk.
Although Rs. 1000 a month isn’t a lot of money, if your goal is to study while gradually entering the stock market, you may take a chance on more risky stocks. For young investors, Best SIP Plan can be a way to start making investments that are tied to the market. Historically, investment in mutual funds such as largecap MFs has been a great way of diversifying riskand getting a good return. You can also diversify your mutual fund investments around to spread out the risks. With SIPs, which start at just Rs. 1,000 per month, you can invest in market-linked financial instruments and get high returns.
Can A Small SIP Of ₹1000 Make A Big Difference?
When you save, you should have a clear goal in mind and a set amount you want to save. This will help you save up the money you need for a specific financial goal, like paying for your kid’s college or your own retirement. And to start, make sure you use the correct method: “income minus savings equals expenses,” not the other way around. Most people spend all of their income and then put the rest into investments. But first, you should save, and then you should spend, so that you can reach your goals comfortably.
Lets assume you invest in one of the top 12 largecap mutual funds which have historically provided return above 12%, Rs 5,000 invested every month in such a fund can grow to around Rs 50 lakh after 20 years. Out of the total amount, Rs 12 lakh will be your investment, and the rest will be your gain.
Best SIP Plan Mutual Funds For 10 Years
Large Cap Mutual Funds invest a significant portion of their corpus (around 80%) in top-tier companies (1st -100th company in terms of market capitalization). They are major companies with a market capitalization of more than Rs. 20,000 crores. These companies are easily identified because they are market leaders in their respective industrial sectors. They have a strong market position, which is why they are known for exhibiting strong growth with high profits. These companies can provide investors with better capital appreciation, consistent compounding, and regular dividends.
When compared to small-cap and mid-cap funds, these funds pose less risk and may be ideal for risk-averse investors.
Let’s have look at some top-performing Large Cap mutual funds basis their 5 year CAGR:- (data collected as on 29th June 2022)
| Fund | 5 Year Return | 3 Year Return | Asset under Management (AUM) (cr.) |
| Canara Robeco Bluechip Equity Fund | 13.96% | 14.83% | 6816.97 |
| Axis Bluechip Fund | 13.43% | 10.57% | 32,561.82 |
| Mirae Asset Large Cap Fund | 12.06% | 11.98% | 30,426 |
| Edelweiss Large Cap Fund | 11.98% | 12% | 310.50 |
| ICICI Prudential Bluechip Fund | 11.96% | 12.53% | 29,985.28 |
*Source : AMFI
Best SIP Liquid Funds In India
Liquid Funds invest largely in highly liquid money market instruments and short-term debt securities, resulting in high liquidity. They invest in very short-term instruments with residual maturities of up to 91 days, such as Treasury Bills (T-bills), Commercial Paper (CP), Certificates of Deposit (CD), and Collateralized Lending & Borrowing Obligations (CBLO), to generate optimal returns while maintaining safety and liquidity. Requests for redemption from these Liquid funds are processed within one working (T+1) day.
The amount of risk that comes with liquid funds is low. Liquid funds are the least risky type of debt fund because they invest mostly in high-quality fixed-income securities that will be paid off soon. So, investors who don’t want to take risks can use these funds.
Top 5 Liquid Funds (data collected as on 29th June 2022) basis their 5 year CAGR
| Fund | 5 Year Return | 3 Year Return | AUM (Cr.) |
| Quant Liquid Plan | 5.95% | 5.07% | 673 |
| IDBI Liquid | 5.51% | 4.32% | 753 |
| Mahindra Manulife Liquid Fund | 5.50% | 4.29% | 1366 |
| Franklin India Liquid | 5.49% | 4.28% | 1482 |
| Edelweiss Liquid Fund | 5.48% | 4.28% | 1488 |
*Source: AMFI
Best SIP Debt Funds In India
A debt fund is a type of mutual fund that invests in fixed income instruments like corporate and government bonds, corporate debt securities, money market instruments, etc. that offer capital appreciation. They are also known as debt funds, Income Funds or Bond Funds.
- Debt Funds can be taken into consideration for investments with horizons of one day to three years.
- If you invest for at least three years, they provide superior post-tax returns to FDs.
- Historically,, The liquid debt fund option has been a great place to put your emergency savings. Without taking on too much risk, you can earn higher returns than savings accounts.
Top 5 Debt Funds (data collected as on 29th June 2022) basis their 5 year CAGR
| Fund Name | 5 Year Return | 3 Year Return | AUM (Cr.) |
| SBI Magnum Income Fund | 7.08% | 7.6% | 1,542 |
| ICICI Prudential Bond Fund | 6.60% | 6.95% | 2,571.43 |
| Aditya Birla Sun Life Income Fund | 6.52% | 6.82% | 1531.14 |
| Nippon India Income Fund | 6.30% | 6.63% | 219.96 |
| Canara Robeco Income Fund | 6.24% | 6.51% | 124.81 |
*Source: AMFI
Best SIP International Funds In India
International funds, also referred to as overseas or foreign funds, make investments in markets outside of India. They have a portfolio that includes international mutual funds, ETFs (Exchange Traded Funds), debt funds, and stocks. These mutual funds are also permitted to invest in Indian company GDRs and ADRs (American Depository Receipts).
Because local markets are so volatile, international funds have grown in popularity as an investment choice. In order to boost the diversification of their portfolios, many investors have resorted to international markets. As the success of international markets does not exactly correlate with Indian markets, it is quite effective.
These funds are, however, typically riskier as compared to Liquid funds and other debt funds in domestic market because of the complexity of understanding the economies and market trends of other nations. Macroeconomic variables and unpredictable foreign exchange rates may increase the risks associated with your investments. You can evaluate your risk tolerance and financial objectives in order to select the best foreign mutual funds for your requirements.
Top 5 International Mutual Funds (data collected as on 29th June 2022) basis their 3 year CAGR.
| International Mutual Fund | 3-Year Annualised Returns |
| Principal Global Opportunities Fund- Direct Plan | 25.22% |
| Motilal Oswal Nasdaq 100 Fund of Fund | 19.57% |
| DSP BlackRock US Flexible Equity Fund | 16.41% |
| Nippon India US Equity Opportunities Fund | 12.71% |
| ICICI Prudential Global Stable Equity Fund | 11.90% |
*Source: Kuvera
Best SIP ELSS Funds In India
The Equity-Linked Savings Scheme (ELSS) is a type of equity mutual fund in which at least 80% of the assets are invested in equity and equity-related instruments. Open-ended or closed-ended. ELSS investments are eligible for tax deductions under Section 80C of the Income Tax Act up to a total of 1.5 lakh. The amount you invest in ELSS is deducted from your taxable income, lowering the amount of income tax you pay.
The benefits of ELSS funds
- A three-year lock-in period. The shortest of all tax-saving options
- Their diverse portfolio mitigates risk while ensuring you don’t miss out on any opportunities.
- Invest and earn a higher return than traditional options such as PPF.
Top 5 ELSS Funds(data collected as on 29th June 2022) basis their 5 year CAGR
| Fund Name | 5 Year Return | 3 Year Return | AUM (Cr.) |
| Quant Tax Plan | 20.61% | 31.44% | 1378.16 |
| Mirae Asset Tax Saver Fund | 15.47% | 20.00% | 551.26 |
| Canara Robeco Equity Tax Saver Fund | 14.84% | 17.31% | 11,447.78 |
| Bank of India Tax Advantage Fund | 14.83% | 16.66% | 3,412.90 |
| IDFC Tax Advantage Fund | 13.29% | 16.31% | 3,517.62 |
*Source: AMFI
The Final Line
A SIP is a mechanism that has the potential to generate a wealth corpus over the long term. This method is both powerful and convenient. You can make use of compounding and the rupee cost averaging system to your advantage. It is convenient, and it assists in creating a responsible habit of saving and investing money on a regular basis over the long term. Increasing your investment in a best SIP plan over a prolonged period of time helps enhance your returns. It gives you the opportunity to make a regular investment in a particular mutual fund program. Investing in a mutual fund through a SIP is a powerful strategy that gives you the benefit of doing so at a cheap cost as well as the flexibility to determine the investment amount and the frequency of your contributions.
FAQs
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Which SIP is best for 10 years?
There are many funds mentioned above that have historically given good returns as compared to traditional fixed income instruments such as Fixed Deposits. funds such as equity, debt, international, & liquid have different characteristics which make them unique for an investment strategy. Each one of them is suited for different goals and best SIP plan. However, it may be prudent to diversify one’s portfolio into multiple categories of funds to minimize market volatility. But in 10 years, a lot can change, so what’s best today might not be the best tomorrow.
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How to earn 1 Cr with SIP?
As an illustration, if you start a SIP with Rs. 5,000 each month, you can grow it by 10% annually. As a result, you start a SIP of 5000 per month in the first year and increase it to 5500 per month in the second year (i.e., 5,000 + 10% of 5,000), 6,050 per month in the third year (i.e., 5,500 + 10% of 5,500), and so on.
And if you stay invested in equity funds for 21 years, you can reach your target corpus of Rs. 1 Core with a SIP of Rs. 5500 per month, assuming an annualized rate of return of 12 percent.
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Which SIP gives Highest return?
SIPs in equity funds have historically shown the highest returns in comparison to other mutual funds.
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Which mutual Fund is best for 5 years?
Ans. The Indian market offers several different types of mutual funds, from liquid funds to foreign funds, all of which appeal to diverse investment goals and risk profiles.
However, because they invest in companies that are known to be volatile in the short term but profitable in the long term, equity funds are typically regarded as one of the greatest investments for 5 years or more.
The above-mentioned are Top 5 funds of each category. An individual investor can pick any of them as per their risk appetite and long-term historical returns.
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