5000 Monthly SIP Plans

A systematic investment plan allows you to invest a monthly sum in a single type of fund, be it equity, debt, gold, etc. You can choose to diversify by investing in different types to balance out the risk. A key advantage of SIPs is that you can monitor how the funds are performing based on which you can either increase or decrease the amount of investment. However, in order to enjoy higher returns, you should ideally stay invested for a minimum of 5 years.

Here is a look at a mix of equity and debt funds that you can explore to start a monthly SIP of Rs. 5000. Note that the returns keep changing based on how each fund is performing.

Best Funds for 5000 Monthly SIP Investment

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Category-wise SIP Details

Plans should be opted for by assessing how much risk you are willing to take and what goals you are trying to accomplish. The following sections offer deeper insight into the different categories to help you choose the best monthly SIP plans for Rs. 5000.

1. Equity Funds

   Equity funds are those that invest in stocks and shares of a company. Depending on the performance of the company, the value of the funds goes up or down. This difference is what determines your returns at the base level.

   Equity Sectoral / Thematic

   Sectoral / thematic funds invest in the stocks of companies belonging to a particular niche such as technology, pharma, infrastructure, etc. A monthly SIP of Rs. 5000 in each of these funds for at least 3 years can increase your investment of Rs. 1.8 Lakhs to over Rs. 3 Lakhs.

   • ICICI Prudential Technology Fund - It invests largely in the equity of tech or IT companies. Its 3-year annualized return is 34.25%. The AUM (assets under management) of the fund house stands at Rs. 8742.31 Crores. The AUM is an indicator of the total amount of investment that the fund house controls.

   • Tata Digital India Fund - This fund also invests in the shares of companies in the IT sector. Its 3-year annualized return is 28.87%. A monthly SIP of Rs. 5000 in this fund for 3 years would have become around Rs. 2.76 lakhs from Rs. 1.8 Lakhs. These values will keep changing, so you should keep a track of all your SIP funds.

   Equity Funds by Market Capitalization

   Funds that invest in the equities of large companies (ranking in the top 100 per SEBI guidelines) are large cap funds. Similarly, small cap funds are those that invest in companies ranking above 250. Mid-cap funds fall in the range between. The greater the market capitalization of a company, the more likely it is to get steady consistent returns.

   • Axis Small Cap Fund - This fund invests in the equities of small cap companies, and therefore the risk is extremely high. The 3-year annualized return for the fund is 30.08%. A minimum SIP amount of Rs. 500 per month is required. The total fund size is Rs. 9261 Crores.

   • Mirae Asset Emerging Bluechip Fund - It invests in a mix of large and mid-cap companies. Its 3-year annualized return stands at 21.18%. A monthly SIP of Rs. 5000 for 3 years would have become Rs. 2.38 Lakhs from the total of Rs. 1.8 Lakhs invested over the time period.

2. Tax Saving Funds

   These are primarily equity-based investments, however, these come with tax benefits under section 80C of the Income Tax Act, 1961. A monthly SIP of Rs. 5000 in such funds can help you save on taxes on the extra income earned through the returns on investments.

   Equity ELSS

   • Quant Tax Plan - It comes with a lock-in period of 3 years during which you cannot withdraw any money from the fund. Its 3-year annualized return is 36.82%. Returns of Rs. 1 lakh and above after a year of investment are taxed at 10%.

   • Mirae Asset Tax Saver Fund - This fund also comes with a lock-in period of 3 years. The 3-year annualized return of the fund as of now is 20.61%. This fund also requires investors to pay a tax of 10% if the returns are above Rs. 1 Lakh in a year.

   Disclaimer - The tax benefit is subject to changes in tax laws. *Standard T&C Apply

3. Debt Funds

   Debt funds are low-risk in nature, and subsequently, the returns are lower than equity instruments. Ideally, investors should split their SIP investments into both equity and debt to generate decent returns while erring on the side of caution. A monthly SIP of Rs. 5000 in such funds will offer returns in the range of 7% to 8%.

   • Aditya Birla Sun Life Corporate Bond Fund - Over 96% of the investment is done in debt funds comprising of Government securities and very low-risk securities. The 3-year annualized return of the fund is 7.5%.

   • ICICI Prudential Short Term Fund - Short duration debt funds invest in bonds that mature in 1-3 years. The value of a monthly SIP of Rs. 5000 invested 3 years back would have become over Rs. 2 lakhs by now.

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Summing Up!

A monthly SIP plan for Rs. 5000 can give you increased returns if you continue to stay invested for 5 years or more. Given the range of options available, stick to safer options such as hybrid funds and large-cap funds if you have just started out. As you start to understand more, gradually increase the investment amount and move towards a diversified portfolio comprising of both equity and debt funds.