SIP - Systematic Investment Plan in India

Best SIP Investment Plans in 2025

Discover the best investment options in mutual funds and insurance companies to make a regular SIP investment:

What is a SIP Investment?

A SIP, or Systematic Investment Plan, is a way to invest money regularly in a mutual fund or any other investment. Here, a fixed amount is invested at regular intervals, say monthly or quarterly, instead of a one-time lump-sum payment. The installment amount could be as little as Rs. 100 a month and is similar to a recurring deposit. It’s convenient as you can give your bank standing instructions to debit the amount every month. SIPs promote disciplined investing and rupee cost averaging by buying mutual fund units at different market prices, which helps reduce the impact of volatility. Over time, this approach builds a habit of saving, reduces risk, and allows your money to grow through the power of compounding. 

How Does SIP Investment Work?

You can learn the workings of a systematic investment plan from the following to make better decisions: 

• SIP allows you to invest a fixed amount regularly (monthly, quarterly, etc.) in a mutual fund.

• Your SIP amount is automatically deducted and used to buy units at the current Net Asset Value (NAV).

NOTE: The returns from your SIP will depend on the performance of your chosen fund. However, in the long term, SIP investment plans have been shown to be an excellent way to grow your wealth.

Illustration of Benefits of SIP Investment Plan: 

Suppose an investor starts a SIP with a monthly investment of ₹5,000 for 10 years. If the expected annual return from the chosen mutual fund is 15%, the total amount invested over this period will be ₹6,00,000 (₹5,000 × 12 months × 10 years).

• Monthly SIP investment: ₹5,000

• Time period: 10 years

• Total invested: ₹6,00,000

• Expected annual return: 15%

• Estimated maturity value: ₹13,15,000 (approximately)

• Wealth created: ₹7,15,000 (approximately)

This example demonstrates how regular contributions, rupee cost averaging, and the power of compounding can help grow wealth with SIPs—even when investing the same amount each month.

Why Choose SIP vs Other Options?

Below is a comparison of future value and interest earned for a ₹5,000 monthly investment over 10 years using SIP, Recurring Deposit (RD), and Public Provident Fund (PPF):

Note: SIPs not only offer higher return potential but also greater flexibility and convenience through features like online setup, automatic debits, and the benefit of rupee cost averaging. This makes SIPs a desirable choice, especially among new-generation investors who favor convenience and disciplined, long-term investing.

What are the Key Features and Benefits of SIP Investment Plans?

A Systematic Investment Plan (SIP) is one of the most convenient and effective ways to build wealth steadily over time. It allows investors to contribute small, regular amounts while enjoying flexibility and long-term growth potential. The major features and advantages include:

• Disciplined Wealth Creation: By investing a fixed amount regularly, SIP builds financial discipline and helps develop a long-term savings habit.

• Affordable Start: Begin investing with as little as Rs. 100 per month, with no upper limit on contributions.

• Flexibility: Adjust investment amount, payment frequency, and tenure as per your changing financial goals and risk appetite.

Types of SIP Investment in India

The following table lists the significant types of SIP Plans in India based on the way of investing in a SIP investment plan:

1. Regular (Fixed) SIP

   • Investors contribute a fixed amount at regular intervals (monthly, quarterly, etc.).

   • Ensures disciplined investing and is ideal for those seeking consistency and predictability in their investments.

2. Top-up (Step-up) SIP

   • Allows investors to increase their SIP amount periodically, typically in line with salary increases or increased savings capacity.

   • Helps accelerate wealth accumulation as income grows.

3. Flexible SIP

   • Offers the flexibility to increase, decrease, or pause contributions based on changing financial circumstances.

   • Useful for those with irregular income streams, such as freelancers or business owners.

4. Trigger SIP

   • Investments are made or modified based on predefined triggers, such as market indices, NAV levels, or specific dates.

   • Suitable for seasoned investors who want to capitalize on market movements.

   

5. Perpetual SIP

   • No fixed end date; investments continue until the investor chooses to stop.

   • Ideal for long-term wealth creation without the need to renew or extend the plan.

6. Multi-SIP (Multiple SIP)

   • Enables investment in multiple mutual fund schemes through a single SIP instruction.

   • Simplifies diversification and portfolio management.

7. Goal-Based SIP

   • Designed to help investors achieve specific financial goals, such as education, marriage, or home purchase.

   • Encourages disciplined savings towards defined milestones.

How to Choose the Right SIP Plan?

• Duration: Match your SIP tenure with your financial goal timeline. Longer is better for compounding.

• Risk Tolerance: Choose equity SIPs for high risk/returns or debt SIPs for lower risk.

• AUM: Prefer funds with high Asset Under Management for stability and credibility.

• Diversification: Select SIPs that spread investments across sectors and assets.

• Review: Check performance regularly and adjust contributions or funds as needed.

Tools to Help You Invest in SIP

I know my investment amount I know my goal amount

Monthly SIP Yearly SIP Lumpsum

I want to invest Pro Tip

Financial experts suggest that a person should invest 10-15% of their monthly income for long-term financial growth

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I want to invest for Pro Tip

Financial experts suggest that individuals should ideally invest for a period of 5 to 10 years, or even longer, to maximize the benefits of compounding and navigate market fluctuations effectively

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Expected return Pro Tip

Top 25% of investors consistently generate more than 12% return

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Total Wealth ₹22.4 L

View Plans

I want to save

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Expected return Pro Tip

Top 25% of investors consistently generate more than 12% return

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Monthly Investment ₹22.4 L

View Plans

Top Funds with High Returns (Past 7 Years)

12.34%

Equity Pension

16.14%

Global Equity Index Funds Strategy

17.8%

High Growth Fund

15.5%

Pension India Consumption Fund

20.49%

Multi Cap Fund

14.32%

Accelerator Mid-Cap Fund II

15.62%

Multiplier

14.13%

Frontline Equity Fund

18.41%

Pension Mid Cap Fund

10.64%

Equity II Fund

13.87%

US Equity Fund

14.41%

Growth Opportunities Plus Fund

11.44%

Equity Top 250 Fund

13.41%

Future Apex Fund

11.25%

Pension Dynamic Equity Fund

13.74%

Accelerator Fund

1. SIP Calculator: 

   You can use an SIP calculator to plan your investments systematically. It calculates returns based on your inputs, such as the amount you invest, the duration, and the expected return rate. This tool is easy to use and gives accurate results, helping you make informed financial decisions.

2. XIRR Calculator 

   An XIRR Calculator helps you find the exact rate of return on your investment when there are varying amounts and dates of investment. It gives you a more accurate idea of your returns.

   • Enter the investment amounts and their respective dates.

   • The calculator will show you the XIRR, reflecting your true return rate.

3. CAGR Calculator:

   A CAGR Calculator helps you calculate the Compound Annual Growth Rate, which shows how much your investment has grown each year on average over a specific period.

   • Enter the initial investment amount, final value and investment period.

   • The calculator will show the CAGR, which is the average annual growth rate.

What are the Documents Required for SIP Investment?

You need to submit the following documents to complete your SIP investment process:

• KYC Documents (Any One): PAN (Permanent Account Number) card, Passport, Aadhar Card.

• Bank Account Details: Account Number, Branch Name, IFSC code.

• Address Proof (Any One): Valid Passport, Driving License, Voter ID Card, Utility Bills (electricity, gas, water, or telephone bills).

Taxation of SIP Investment

Taxation on SIP investments depends on the type of mutual fund you choose (equity or debt) and how long you hold your investment. The rules have recently been updated, so here's a simple breakdown.

1. Equity Funds (65% or more in Indian stocks)

   • Short-Term Capital Gains (STCG):

     • Holding Period: Less than 12 months.

     • Tax: A flat rate of 20% is charged on your profits. This rate was increased in the Union Budget 2024.

   • Long-Term Capital Gains (LTCG):

     • Holding Period: More than 12 months.

     • Tax: A tax of 12.5% is charged, but only on gains over ₹1.25 lakh in a financial year. Gains up to ₹1.25 lakh are tax-free.

2. Debt Funds (less than 65% in stocks)

   • New Rule (for investments after April 1, 2023):  All profits, regardless of the holding period, are added to your total income and taxed at your personal income tax slab rate. The previous benefit of a lower long-term capital gains tax with indexation has been removed.

3. ELSS Funds (Tax-Saving SIPs)

   • Tax Benefit: You can get a tax deduction of up to ₹1.5 lakh per year on the amount you invest u/s 80c.

   • Lock-in Period: Each SIP installment has a mandatory 3-year lock-in period.

   • Tax on Gains: Since you can only withdraw after three years, any profits are considered Long-Term Capital Gains (LTCG) and are taxed at the same rate as other equity funds (12.5% on gains over ₹1.25 lakh).

Who Should Invest in a SIP Investment Plan?

A Systematic Investment Plan can be a good investment option for a variety of people. Here are some characteristics that make someone a good fit for a SIP:

• First-time Investors

• Young Professionals

• Risk-Averse Individuals

• Individuals with a long-term investment horizon

• Long-Term Planners

• People with Irregular Income

• Goal-Oriented Investors

Risk Assessment and Management in SIPs as per Age

Systematic Investment Plans (SIPs) involve investing a fixed amount regularly in mutual funds. The risk level should align with your age, financial goals, and risk-taking ability.

Understanding Risk Assessment in SIPs

• Risk assessment is important for SIPs to align your investments with individual financial goals and risk tolerance.

• You should evaluate your financial objectives, such as buying a home or funding education, and set a timeline for achieving these goals.

Age-Wise Risk Management:

SIP Investment Mistakes to Avoid

Some of the common SIP mistakes that you should consider to avoid low returns are as follows:

• Stopping During Market Volatility: Don’t halt SIPs when markets fall. Corrections help you buy more units at lower prices.

• No Clear Goals: Without defined goals, your SIP lacks proper direction and planning.

• Chasing Past Returns: Don’t pick funds only for past performance; check consistency and suitability.

Conclusion

Systematic Investment Plans (SIPs) are a disciplined and efficient way of investment, allowing you to contribute regularly to market-linked funds. The SIP investment plans help in averaging the cost of your investment and compound your returns over time, making it an ideal investment option for long-term financial goals.