Should You Do SIP in Debt Funds

Investing through a Systematic Investment Plan or SIP in debt funds can be a good choice for people who want steady returns and stability. But before you start investing, you need to think carefully about your own financial goals and how much risk you are comfortable with.

Read more

SIP Plan Benefits
Start SIP with as low as ₹1000
Start SIP with as low as ₹1000
No hidden charges
No hidden charges
Save upto ₹46,800 in Tax
Save upto ₹46,800 in Taxunder section 80C^
Zero LTCG Tax
Zero LTCG Tax
Disciplined & worry-free investing
Disciplined & worry-free investing

Payment Mode
Invest
₹ 10,000
Invest for
AUM (Cr)

₹10,554

NAV

114.14

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 28.6 21.1 17.8 %

Instant tax receipt
AUM (Cr)

₹2,693

NAV

71.67

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 20.95 15.68 15.53 %

Instant tax receipt
AUM (Cr)

₹3,282

NAV

70.19

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 20.99 16.04 15.13 %

Instant tax receipt
AUM (Cr)

₹5,681

NAV

80.91

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 20.38 12.4 14.97 %

Instant tax receipt
AUM (Cr)

₹36,935

NAV

76.38

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 21.72 14.49 14.67 %

Instant tax receipt
AUM (Cr)

₹433

NAV

67.94

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 17.79 13.24 14.52 %

Instant tax receipt
AUM (Cr)

₹4,390

NAV

68.06

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 20.68 14.47 14.42 %

Instant tax receipt
AUM (Cr)

₹3,552

NAV

41.11

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 17.79 12.99 14.23 %

Instant tax receipt
AUM (Cr)

₹7,241

NAV

154.47

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 17.82 13.2 14.01 %

Instant tax receipt
AUM (Cr)

₹235

NAV

49.42

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 20.36 14.6 13.98 %

Instant tax receipt
AUM (Cr)

₹2,693

NAV

71.67

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 20.95 15.68 15.53 %

AUM (Cr)

₹3,282

NAV

70.19

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 20.99 16.04 15.13 %

AUM (Cr)

₹433

NAV

67.94

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 17.79 13.24 14.52 %

AUM (Cr)

₹4,390

NAV

68.06

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 20.68 14.47 14.42 %

AUM (Cr)

₹3,552

NAV

41.11

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 17.79 12.99 14.23 %

AUM (Cr)

₹7,241

NAV

154.47

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 17.82 13.2 14.01 %

AUM (Cr)

₹235

NAV

49.42

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 20.36 14.6 13.98 %

AUM (Cr)

₹104

NAV

54.94

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 19.95 14.01 13.64 %

AUM (Cr)

₹13,106

NAV

81.15

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 17.04 12.44 13.2 %

AUM (Cr)

₹2,130

NAV

65.64

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 16.11 12.07 12.87 %

AUM (Cr)

₹10,554

NAV

114.14

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 28.6 21.1 17.8 %

AUM (Cr)

₹5,681

NAV

80.91

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 20.38 12.4 14.97 %

AUM (Cr)

₹36,935

NAV

76.38

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 21.72 14.49 14.67 %

AUM (Cr)

₹2,211

NAV

62.53

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 26.65 20.83 20.1 %

AUM (Cr)

₹1,021

NAV

72.98

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 19.89 14.16 14.9 %

AUM (Cr)

₹13,589

NAV

68.37

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 18.77 13.18 13.45 %

AUM (Cr)

₹3,406

NAV

59.13

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 20.06 13 12.83 %

AUM (Cr)

₹1,125

NAV

52.57

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 18.82 12.32 12.59 %

AUM (Cr)

₹528

NAV

57.06

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 17.17 11.46 11.73 %

AUM (Cr)

₹215

NAV

94.32

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 7.86 8.31 8.51 %

AUM (Cr)

₹831

NAV

40.54

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 5.98 7.89 7.69 %

AUM (Cr)

₹488

NAV

38.24

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 5.67 7.93 7.51 %

AUM (Cr)

₹123

NAV

29.45

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 6.02 7.04 7.19 %

AUM (Cr)

₹71

NAV

40.75

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 5.44 7.32 7.18 %

AUM (Cr)

₹198

NAV

46.83

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 4.89 7.35 7.11 %

AUM (Cr)

₹19,241

NAV

49.64

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 5.46 7.26 7.04 %

AUM (Cr)

₹7,540

NAV

32.11

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 5.01 7.03 7.01 %

AUM (Cr)

₹93

NAV

38.53

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 5.3 7.33 6.99 %

AUM (Cr)

₹1,064

NAV

46.35

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 5.86 7.19 6.95 %

AUM (Cr)

₹892

NAV

97.92

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 19.94 15.74 15.56 %

AUM (Cr)

₹363

NAV

47.61

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 13.31 10.85 10.77 %

AUM (Cr)

₹66

NAV

59.84

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 10.79 9.52 10.3 %

AUM (Cr)

₹5,648

NAV

39.58

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 12.41 9.72 10.28 %

AUM (Cr)

₹492

NAV

102.87

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 11.29 9.87 10.27 %

AUM (Cr)

₹22,609

NAV

72.27

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 11.05 9.65 10.1 %

AUM (Cr)

₹7,725

NAV

109.42

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 11.81 9.85 9.99 %

AUM (Cr)

₹286

NAV

31.13

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 12.23 9.21 9.95 %

AUM (Cr)

₹839

NAV

38.8

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 12.24 9.8 9.91 %

AUM (Cr)

₹1,978

NAV

43.18

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 12.81 9.5 9.77 %

AUM (Cr)

₹1,321

NAV

81.46

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 18.97 13.18 14.01 %

AUM (Cr)

₹7,241

NAV

155.14

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 17.64 13.26 13.96 %

AUM (Cr)

₹2,935

NAV

69.1

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 16.82 12.75 13.39 %

View More

What is SIP Investment?

SIP (Systematic Investment Plan) is a way to invest in market-linked funds by regularly contributing a fixed amount of money at set intervals.

It is a disciplined approach that helps spread out investment risk and can lead to significant wealth accumulation over time through compounding. Tools like an SIP Return Calculator can help you make your investment decisions smarter.

  • Insurance Companies
  • Mutual Funds
Returns
Fund Name 5 Years 7 Years 10 Years
High Growth Fund Axis Max Life
Rating
28.6% 21.1%
17.8%
View Plan
India Consumption Fund Tata AIA Life
Rating
26.65% 20.83%
20.1%
View Plan
Accelerator Mid-Cap Fund II Bajaj Allianz
Rating
20.38% 12.4%
14.97%
View Plan
Opportunities Fund HDFC Life
Rating
21.72% 14.49%
14.67%
View Plan
Opportunities Fund ICICI Prudential Life
Rating
20.06% 13%
12.83%
View Plan
Multiplier Birla Sun Life
Rating
22.25% 14.42%
15.78%
View Plan
Virtue II PNB MetLife
Rating
20.99% 16.04%
15.13%
View Plan
Equity II Fund Canara HSBC Life
Rating
16.71% 9.95%
10.99%
View Plan
Balanced Fund LIC India
Rating
10.6% -
-
View Plan
Equity Fund SBI Life
Rating
16.87% 11.68%
12.1%
View Plan
Fund rating powered by
Last updated: Aug 2025
Compare more funds

  Returns
Fund Name 3 Years 5 Years 10 Years
Active Fund QUANT 23.92% 31.48%
21.87%
Flexi Cap Fund PARAG PARIKH 20.69% 26.41%
19.28%
Large and Mid-Cap Fund EDELWEISS 22.34% 24.29%
17.94%
Equity Opportunities Fund KOTAK 24.64% 25.01%
19.45%
Large and Midcap Fund MIRAE ASSET 19.74% 24.32%
22.50%
Flexi Cap Fund PGIM INDIA 14.75% 23.39%
-
Flexi Cap Fund DSP 18.41% 22.33%
16.91%
Emerging Equities Fund CANARA ROBECO 20.05% 21.80%
15.92%
Focused fund SUNDARAM 18.27% 18.22%
16.55%

Last updated: August 2025

Compare more funds

What are Debt Funds?

Debt funds are a type of market-linked fund that primarily invests in fixed-income securities such as government and corporate bonds, treasury bills, and money market instruments. 

These funds aim to provide steady income to investors with relatively lower risk compared to equity funds. The returns from debt funds are generated through interest payments and capital appreciation of the underlying securities. 

They are suitable for investors seeking stability and regular income from their investments.

SIP Calculator

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
/Month
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
Years
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Expected return Pro Tip
Top 25% of investors consistently generate more than 12% return
% Annually
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Total Wealth ₹22.4 L
View Plans
I want to save
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
Years
  • 1
  • 2
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  • 31
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  • 38
  • 39
  • 40
Expected return Pro Tip
Top 25% of investors consistently generate more than 12% return
% Annually
  • 1
  • 2
  • 3
  • 4
  • 6
  • 7
  • 8
  • 9
  • 11
  • 12
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Monthly Investment ₹22.4 L
View Plans
Top Funds with High Returns (Past 7 Years)
High Growth Fund
17.8%
High Growth Fund
India Consumption Fund
20.1%
India Consumption Fund
Accelerator Mid-Cap Fund II
14.97%
Accelerator Mid-Cap Fund II
Opportunities Fund
14.67%
Opportunities Fund
Opportunities Fund
12.83%
Opportunities Fund
Multiplier
15.78%
Multiplier
Virtue II
15.13%
Virtue II
Equity II Fund
10.99%
Equity II Fund
Accelerator Fund
13.98%
Accelerator Fund
Pension Dynamic Equity Fund
11.55%
Pension Dynamic Equity Fund
Frontline Equity Fund
14.42%
Frontline Equity Fund
Equity Pension
12.59%
Equity Pension
Equity Top 250 Fund
11.73%
Equity Top 250 Fund
Growth Opportunities Plus Fund
14.9%
Growth Opportunities Plus Fund
Future Apex Fund
13.64%
Future Apex Fund
US Equity Fund
13.87%
US Equity Fund

Volatility in Bond Funds 

Bond funds have a reputation for being relatively stable investments but still can experience price fluctuations. This volatility is mainly caused by changes in interest rates.

  1. Impact of Interest Rates on Bond Funds:

    • Inverse Relationship: Bond prices and interest rates have an inverse relationship. When interest rates rise, existing bonds with lower yields become less attractive, which causes their prices to fall. Conversely, when interest rates drop, the value of older bonds with higher yields goes up.

    • Duration Matters: The sensitivity of a bond fund to interest rate changes depends on its duration. Duration is a measure of a bond's average life, considering its coupon payments and maturity date. Generally, bond funds with longer durations will experience greater price fluctuations when interest rates change.

    start-an-sip-today-watch-your-money-grow start-an-sip-today-watch-your-money-grow
  2. Other Factors Influencing Bond Fund Volatility:

    • Credit Quality: Bonds issued by borrowers with lower credit ratings (high-yield bonds) are typically more volatile than those from investment-grade issuers. This is because they carry a higher risk of default.

    • Foreign Currency Exposure: Bond funds that invest in bonds denominated in foreign currencies can be impacted by fluctuations in exchange rates.

Should You Do SIP in Debt Funds?

Investing in debt funds through best SIP plans can be a good way to invest in debt funds, even if you are in debt. Let us learn the reasons below:

  1. Disciplined Investing: 

    • SIP makes sure you invest a set amount regularly, helping you stick to a saving routine.

    • No matter how the market behaves, you keep investing without making quick decisions.

  2. Rupee Cost Averaging: 

    • By investing regularly, you buy when prices are high and low, balancing out your overall investment cost.

    • This way, you do not have to worry about timing the market perfectly.

  3. Power of Compounding: 

    • When you reinvest your earnings along with your initial investment, your money grows faster.

    • Even if you are investing in debt funds, compounding helps your savings grow steadily over time.

    start-small-&-build-your-wealth-for-a-brighter-tomorrow start-small-&-build-your-wealth-for-a-brighter-tomorrow
  4. Better Returns: 

    • Debt funds usually give you more returns than just keeping your money in a regular savings account.

    • They are safer than stocks but offer more potential for growth than simple savings.

  5. Easy Access: 

    • With debt funds, it is easy to take your money out when you need it.

    • Unlike fixed deposits, you can withdraw without facing penalties.

  6. Tax Benefits: 

    • If you keep your money in debt funds for more than 3 years, you will pay less tax on your earnings.

    • This means you get to keep more of your profits in the long run.

In Conclusion

Investing in Debt funds through SIPs can offer stability and potential returns with lower risk. By systematically investing over time, investors can benefit from rupee-cost averaging and potentially capitalize on market fluctuations. However, it is essential to assess individual financial goals, risk tolerance, and the current economic landscape before making any investment decisions. An SIP calculator can be helpful to estimate your future returns from SIP in debt funds.

SIP Hub

FAQ's

  • Is it good to do SIP in debt funds?

    SIP (Systematic Investment Plan) is a great way to invest in debt funds for these reasons:
    • Regular Investing: SIP helps you invest a fixed amount regularly, which builds a good savings habit.

    • Less Impact of Market Changes: By spreading out your investments over time, SIP reduces the effect of market ups and downs.

    • Potential for Growth: Even in debt funds, regular investing through SIP allows your money to grow over time.

    • Better Returns: Debt funds usually offer higher returns compared to traditional fixed deposits.

    • Tax Benefits: Holding debt funds for over 3 years can bring tax advantages, making them more tax-efficient than fixed deposits.

  • Is it advisable to invest in debt funds?

    Debt funds can be a suitable investment option for various reasons:
    • Stable Returns: Debt funds generally offer more stable returns compared to equity funds.

    • Lower Risk: Debt markets are typically less volatile than equity markets, making debt funds suitable for risk-averse investors.

    • Emergency Fund: Debt funds, especially short-term ones, provide easy access to your money for emergencies.

    • Diversification: Debt funds can help diversify your portfolio, reducing overall risk.

  • Which SIP is better, debt or equity?

    The choice between debt and equity SIP depends on your investment goals, risk tolerance, and investment horizon.
    • Debt SIP: Suitable for short-term goals, regular income needs, or if you have a low-risk appetite.

    • Equity SIP: Suitable for long-term goals (over 5 years) and potentially higher returns, but with higher risk.

  • Should we invest in SIP during recession?

    SIP can be a particularly smart strategy during a recession:
    • Rupee-Cost Averaging Advantage: Market downturns present opportunities to buy more units at lower prices, potentially averaging your cost-effectively.

    • Disciplined Approach: SIP maintains your investment discipline irrespective of market conditions.

˜Top plans are based on annualized premium, for bookings made through https://www.policybazaar.com in FY 25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
Disclaimer:#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. All SIPs listed here are of insurance companies’ funds. The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
++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.
**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).

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