SIP Investment in India for NRIs

A Systematic Investment Plan (SIP) is a popular investment tool offered by mutual fund houses, insurance companies (ULIP), and financial institutions. It allows individuals to invest in market-related funds in a disciplined and regular manner.

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Systematic Investment Plan (SIP)
CATEGORY SIP By Insurance Companies SIP By Fund Houses
RETURNS (Past 10 Years) 13.66%+ 14.48%+
LIFE COVER
TAX SAVING
Under 80C
On all plans
Only on ELSS
TAX
FREE MATURITY
BENEFIT
Under 10(10D)*

+Large cap category average past 10 years performance as on date October 2023, as per Morning star.
* If premium payable is below Rs. 2.5 lakh in any year . Standard T&C Apply
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

  • Insurance Companies
  • Mutual Funds
Returns
Fund Name 3 Years 5 Years 10 Years
Top 200 Fund Tata AIA 25.81% 27.49%
21.65%
View Plan
Virtue II PNB Metlife 24.47% 23.35%
19.37%
View Plan
Pure Equity Birla Sun Life 21.79% 19.59%
18.46%
View Plan
Growth Opportunities Plus Fund Bharti AXA 17.41% 18.75%
18.22%
View Plan
Pure Stock Fund Bajaj Allianz 18.6% 17.6%
17.82%
View Plan
Blue Chip Fund HDFC Standard 12.63% 15.02%
15.28%
View Plan
Growth Super Fund Max Life 12.81% 15.16%
14.69%
View Plan
Equity Fund SBI 13.65% 15.04%
14.38%
View Plan
Multi Cap Growth Fund ICICI Prudential 14.97% 14.08%
14.17%
View Plan
Equity II Fund Canara HSBC Oriental Bank 12.23% 12.78%
12.45%
View Plan

Updated as on October 2023

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Returns
Fund Name 3 Years 5 Years 10 Years
Large Cap Fund Nippon India 29.45% 15.33%
17.04%
Bluechip Fund SBI 22.34% 14.79%
15.74%
Cap Fund Edelweiss Large 20.14% 14.01%
14.37%
Frontline Equity Fund Aditya Birla Sun Life 21.57% 13.35%
14.61%
Bluechip Fund ICICI Prudential 24.00% 14.36%
15.43%
Large Cap Fund Mirae Asset 18.65% 13.49%
16.93%
Bluechip Equity Fund Canara Robeco 18.57% 15.24%
14.42%
Bluechip Growth Kotak 19.78% 14.55%
14.76%
Large Cap Fund Baroda BNP Paribas 19.37% 15.09%
14.67%

Updated as on October 2023

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Investors can easily invest in the best SIP plans in India to accumulate high returns even during volatile market scenarios. These plans are available to all residents of India living within or outside the country.

Investment Return Calculator (Power of Compounding)
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Invest For (in Years)

1 30

Stay invested for (in Years)

1 30

Expected rate of return (in %)

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NRI SIP Investment Plans in 2023

A wide range of systematic investment options are available today in the market. Let us look at a few top-performing funds which are apt for SIP investment in 2023.

Returns
Fund Name 3 Years 5 Years 10 Years
Top 200 Fund TATA AIA 34.83% 17.61% 17.78%
Growth Fund LIC 16.56% - 16.05%
Super Select Equity Fund TATA AIA 23.19% 9.31% 15.77%
Virtue II PNB METLIFE 26.19% 13.21% 15.68%
Growth Opportunities Plus Fund BHARTI AXA 26.35% 11.82% 15.65%
Pure Stock Fund BAJAJ ALLIANZ 20.31% 9.34% 15.38%
Pure Equity BIRLA SUN LIFE 22.91% 9.68% 15.33%
Large Cap Equity Fund TATA AIA 28.92% 14.23% 14.59%
Equity Top 250 Fund EDELWIESS TOKIO 22.78% 8.48% 14.13%
Equity Growth Fund II BAJAJ ALLIANZ 23.16% 10.17% 14.11%
Frontline Equity Fund KOTAK MAHINDRA OM 26.33% 11.3% 13.97%
Whole Life Aggressive Growth Fund TATA AIA 21.59% 12.05% 13.77%
Blue Chip Fund HDFC STANDARD 23.26% 10.69% 13%
Future Apex Fund FUTURE GENERALI INDIA 30.71% 12.88% 12.96%
Top 50 Fund TATA AIA 26.11% 11.71% 12.96%
Accelerator Fund AEGON LIFE 24.89% 12.32% 12.84%
Equity Large Cap Fund EDELWIESS TOKIO 23.6% 8.37% 12.62%
Super 20 BIRLA SUN LIFE 22.92% 12.17% 12.58%
Equity Fund SBI 22.49% 9.44% 12.56%
Maximizer BIRLA SUN LIFE 24.36% 10.38% 12.53%
Growth Super Fund MAX LIFE 21.87% 10.86% 12.52%
Bluechip Equity Fund BAJAJ ALLIANZ 24.12% 11.93% 12.07%
Bluechip Fund ICICI PRUDENTIAL 25.26% 9.89% 11.77%
Future Opportunity Fund FUTURE GENERALI INDIA 29.25% 11.39% 11.59%
Multi Cap Growth Fund ICICI PRUDENTIAL 22.1% 5.73% 11.31%
Value & Momentum BIRLA SUN LIFE 25.05% 4.83% 10.95%
Equity II Fund CANARA HSBC ORIENTAL BANK 22.99% 7.58% 10.76%
Growth Plus Fund CANARA HSBC ORIENTAL BANK 19.21% 7.17% 10.37%

Note: Returns are subject to change based on investment value, tenure, and market volatility. Policyholder bears the risks arising due to market conditions.

What Is SIP?

SIP meaning: A popular investing method, Systematic Investment Plan (SIP) for NRIs allows you to invest in mutual funds in a disciplined and regular manner.

  • It is a simple and convenient method to invest in mutual funds and ULIP plans that help achieve long-term financial goals.

  • SIP investment India for NRIs allows you to invest a fixed amount periodically in your favorite mutual fund schemes or regular-premium ULIP Plans to grow wealth through compounding.

  • SIP for NRIs helps spread the investment over a long period, further reducing the impact of market volatility on overall investment value.

  • It is also convenient for people who want to invest small amounts monthly but also want to get the benefits of market-based returns.

Characteristics of SIP-Based Mutual Funds and SIP-Linked ULIP Plans:

  • SIP mutual funds are flexible, allowing investors to decrease or increase the investment amount over time. They can also stop investing in SIP plans per convenience.

  • SIP ULIP plans allow investors to benefit from Top-up premium payments in case of availability of additional money with you for investment and gain higher maturity returns.

  • SIP Mutual Funds and SIP ULIP plans are pocket-friendly investments to build significant wealth in the long term.

People Also Read: Best Pension Plans In India

How Does SIP (Systematic Investment Plan) Work?

SIP in India works on Rupee-Cost Averaging. The best SIP plans in India following this technique often have the highest returns and minimized risks.

What is Rupee-Cost Averaging?


Rupee-Cost Averaging is a SIP investment strategy wherein you invest a fixed amount at regular intervals, regardless of the market conditions. This approach helps reduce the impact of market fluctuations on the investment as the average unit price lowers over long periods.

Example:


Anshul decides to invest Rs. 10,000 in equity market that’s currently trading at Rs. 100. Instead of investing the entire amount at once; he invests Rs. 1,000 regularly for 10 months. This way, Anshul buys stock units at different prices depending on the market value at the time of purchase. 

If the stock price drops to Rs. 80 in the second month, he can buy more shares for the same Rs. 1,000. If the stock price increases to Rs. 120 in the third month, he buys fewer shares for the same amount.

Over time, the average cost of investment will even out, reducing the impact of short-term market fluctuations. It also helps provide a more stable return on investment over the long term.

Power of Compounding through SIPs

Whatever amount you invest in SIP Mutual Funds or SIP ULIP plans, you earn interest on it. The longer the tenure, the higher the fund value. If you stay invested for longer, you can accumulate more wealth with the power of compounding. 

Investing as early as possible also helps create more wealth over a long period than the one who comes in later.

Types of SIPs in India - (Systematic Investment Plans)

Systematic Investment Plans (SIP) are of 4 types and a short description of each is given below:

SIP Type Description
Top-up SIP Allows periodic increases in investment amount, maximizing returns on well-performing mutual fund schemes
Flexible SIP Allows both increase and decrease of investment amount based on cash flow, helpful during cash crunch or bonus
Perpetual SIP Investment continues without an end date, allows redemption when financial goals are met, disciplined investment
Trigger SIP Allows setting of NAV, index level or event, not recommended for investors with limited knowledge of markets

People Also Read: SBI Annuity Deposit Scheme Calculator in India

Benefits of Investing in SIP

SIP investments in India offer various benefits to investors. With a systematic investment plan, an individual can reap significant returns by investing a small amount regularly. The following are the benefits of investing in SIP.

  1. Convenience 

    The Investors can start making the mutual funds investment through SIP with a minimum amount of Rs. 500 and Rs. 1000 in the case of ULIP plans. As there is no upper limit to the investment amount, you can quickly increase it over a period or as and when it suits you. Investors also get an option to auto-debit the amount each month.

  2. Rupee-Cost Averaging

    NRIs do not need to time the market. Investors can buy more units when the markets are low and buy fewer units when the market goes upward. This reduces the overall investment cost and risks.

  3. Power of Compounding

    A small amount invested regularly can multiply innumerably over a long-term. The benefit of compound interest ensures profitable long-term returns compared to one-time investment.

  4. Higher Returns than RD

    SIP Investment Plan offers higher returns than conventional Fixed Deposits (FDs) and Recurring Deposits (RDs). SIP ULIP investments and mutual fund plans help deal with market fluctuation and provide returns irrespective of the fund’s performance.

SIP Mutual Fund vs SIP ULIP Plans

SIP Mutual Fund SIP ULIP Plans
Investment Type Investment in a portfolio of stocks, shares, or bonds Investment in market-linked assets with life coverage benefits
Offered by Mutual Fund houses Insurance companies
Regulated by Securities and Exchange Board of India (SEBI) Insurance Regulatory and Development Authority (IRDAI)
Returns Higher as compared to traditional investment options Great returns and insurance benefits after the maturity period
Investment Amount Small amounts at regular intervals Small amounts at regular intervals
Fund Manager's role Professional fund managers collectively manage funds Insurance companies manage funds
Maturity Period No fixed maturity period Maturity period after which insurance benefits are provided
Risk Profile Can be high or low depending on the mutual fund Can be high or low depending on the market performance
Taxation Long-term capital gains tax after 1 year of investment Tax benefits under Section 80C of the Income Tax Act, 1961
Liquidity Can be redeemed at any time Partial withdrawal and surrender options available at a cost

Premium payment options for SIP ULIP based plan:

  • Regular Premium SIP Plans: Premium is paid in the regular frequency of Monthly/Quarterly/ Half-Yearly/ Yearly for a full policy term (PT).

  • Limited Premium SIP Plans: Full Premium is paid in the frequency of Monthly/ Quarterly/ Half-yearly/ Annually for a fixed period. Example: 3/5/7/10/15/20/25 years, and so on.

People Also Read: Pros and Cons of NPS in India

SIP or One-Time Investment: How Should I Invest?

It is often found that new investors get confused between SIP investment and one-time investment. To put rest to this confusion, we have briefly discussed both investment options in the table below.

One-time Investment SIP Investment
The investors need to invest a lump-sum payment during the tenure of the investment. SIP investment plans include period investment, where the investors can invest a fixed amount per month in the fund option of their choice.
Investment earns better returns on investment at a time when the market performs high. SIP investment earns better returns on investment at a time when the market performs low.
The One-time investment can result in a loss during market fluctuation. With the benefit of rupee cost averaging, SIP investment helps to deal with the market crash.

How to Choose a SIP - (Systematic Investment Plan)?

Investors can get information about various mutual funds and ULIP plans online. However, you must keep the following points in mind to take the final call.

  1. Duration of SIP

    The duration of SIP Mutual Fund and SIP ULIP Plan investment is an important factor to consider from the point of view of risk, return, and tax. While investing through SIP, the investors should keep a reference point of 5 years and check how the fund performs across the market.

  2. Fund House

    It is crucial to check the reputation of the fund house of the Financial Institution and insurance company before choosing a plan. The performance of the fund house will give investors an estimation of how well the fund managers will be able to handle the market lows and highs without letting the investors feel the impact.

  3. Rs. 500 Cr Asset under Management

    Rs. 500 Crores asset size can be considered an appropriate benchmark while choosing a fund house. It does not mean that funds below this asset size are bad; rather, it signifies their higher levels of market volatility.

How to Invest in SIP?

The investment process in SIP ULIP Plans and SIP Mutual Funds is simple and hassle-free. However, investors need to consider the below-mentioned points while investing in SIP.

  1. Set Investment Goal

    Every SIP mutual fund and SIP ULIP plan investment has a set purpose and goal. According to one's requirements and objectives, the investors can choose the fund option to invest in.

  2. Select the Right Plan

    As there is a wide range of SIP investment plans available in the market, select the right plan by checking the past performance of the funds.

  3. KYC

    For all SIP ULIP plans and SIP mutual fund investments, having a net-banking account and fulfilling the KYC documentation is mandatory. The investors can opt for the e-KYC option to upload the documents online and fulfil the process of knowing your customers.

How to Switch Between Funds in SIP?

In case you want to change your fund options under your best SIP plan in India, follow these steps as mentioned below:

  • Stop your existing SIP by providing a simple request on paper. It takes around 15 days to stop your current fund.

  • Fill out the new application form for the fund you plan to do SIP, SIP registration, and OTM/NACH forms.

  • Deposit the fund amount with an authorized representative.

How Much Do You Need to Start a SIP?

A systematic investment plan helps you achieve these goals sensibly through a ULIP Plan or mutual fund scheme. In return, it manages your investment portfolio. You can start investing in the best SIP plan in India with a minimum of Rs. 500. Use Policybazaar’s SIP calculator to know your investment amount per your goals and duration.

Tax Benefit of Investing in SIP

Equity-Linked Saving Schemes (ELSS) investments through SIPs are eligible for tax deductions under Section 80C of the Income Tax Act. Up to Rs. 1.5 lakh invested in ELSS funds in a financial year can be claimed as deduction from taxable income, thereby reducing the overall tax liability.

How Does SIP Calculator Work?

SIP Calculator is an online tool that enables you to calculate your SIP investment plan returns over a specific period even before starting your investment.

  • SIP returns calculation is based on the principle of compound interest.

  • You must enter the amount you wish to invest and select the investment tenure. This tool will then quickly calculate the returns for you.

  • SIP Calculator is quite helpful for you to decide the amount you want to invest in the ULIP plan or the mutual funds, as you may want to increase your investment amount for much higher returns in the future.

People Also Read: HDFC Annuity Plans for NRI

Wrapping It Up!

Attractive returns, payment flexibility, and no lock-in period make SIP an attractive investment option among investors. Considering some crucial information, planning your next investment in SIP Mutual Funds and ULIP plans should become much easier.

FAQ's

  • Can NRIs invest in SIP funds in India?

    Yes, SIP investment plans are available for NRIs.
  • How can NRIs track their investments in SIP funds?

    NRIs can track their investments in SIP funds by checking their account statements online or through mobile apps provided by the fund houses.
  • Can NRIs redeem their SIP investments before the maturity date?

    Yes, NRIs can redeem their SIP investments before the maturity date. Withdrawals are subject to certain terms and conditions.
  • What documents are required for NRIs to invest in SIP funds in India?

    NRIs must submit their PAN card, passport, and overseas address proof to invest in SIP funds in India.

+The Returns are 5 years of cost-adjusted returns of large-cap funds as of 18 Dec 2023, as per moneycontrol.
^If premium payable is below Rs. 2.5 lakh in any year . Standard T&C Apply
*Past 10 Year annualised returns as on 01-12-2023
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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