Difference Between SIP and Mutual Fund

For new investors, the terms SIP and mutual fund often create confusion. While they are closely related, they are not the same. A mutual fund is an investment product, and SIP is simply a way to invest in it. Understanding the difference between SIP and mutual fund can help you choose the right investment approach based on your financial goals, risk appetite, and budget.

SIP Plan Benefits

Start SIP with as low as ₹1000

No hidden charges

Save upto ₹46,800 in Taxunder section 80C^{^}

Zero LTCG Tax^¶

Disciplined & worry-free investing

Best SIP Funds

Tax Saving Funds Large Cap Low Return Funds Mid Cap Mid Return Funds Multi Cap Debt Funds Shariah Funds Balanced Funds

Payment Mode

Invest

₹ 10,000

Invest for

High Growth Fund

AUM (Cr)

₹10,929

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 29.3 22.69 17.8 %

View Fund

Instant tax receipt

Large Cap Equity Fund

AUM (Cr)

₹2,606

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 21.7 17.98 16 %

View Fund

Instant tax receipt

Virtue II

AUM (Cr)

₹3,292

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 20.88 17.74 15.22 %

View Fund

Instant tax receipt

Opportunities Fund

AUM (Cr)

₹35,507

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 21.9 16.66 14.7 %

View Fund

Instant tax receipt

Accelerator Mid-Cap Fund II

AUM (Cr)

₹5,476

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 21.13 14.65 14.53 %

View Fund

Instant tax receipt

Grow Money Plus Fund

AUM (Cr)

₹426

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 18.1 15.68 14.53 %

View Fund

Instant tax receipt

Frontline Equity Fund

AUM (Cr)

₹4,466

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 20.94 16.9 14.41 %

View Fund

Instant tax receipt

Diversified Equity Fund

AUM (Cr)

₹3,538

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 17.81 15.01 14.11 %

View Fund

Instant tax receipt

Accelerator Fund

AUM (Cr)

₹232

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 20.75 16.84 14.04 %

View Fund

Instant tax receipt

Future Apex Fund

AUM (Cr)

₹108

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 20.91 16.65 13.77 %

View Fund

Instant tax receipt

Large Cap Equity Fund

AUM (Cr)

₹2,606

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 21.7 17.98 16 %

View Fund

Virtue II

AUM (Cr)

₹3,292

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 20.88 17.74 15.22 %

View Fund

Grow Money Plus Fund

AUM (Cr)

₹426

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 18.1 15.68 14.53 %

View Fund

Frontline Equity Fund

AUM (Cr)

₹4,466

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 20.94 16.9 14.41 %

View Fund

Diversified Equity Fund

AUM (Cr)

₹3,538

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 17.81 15.01 14.11 %

View Fund

Accelerator Fund

AUM (Cr)

₹232

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 20.75 16.84 14.04 %

View Fund

Future Apex Fund

AUM (Cr)

₹108

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 20.91 16.65 13.77 %

View Fund

Pure Stock Fund

AUM (Cr)

₹7,238

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 17.74 14.8 13.62 %

View Fund

Pure Equity

AUM (Cr)

₹2,922

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 17.43 14.89 13.28 %

View Fund

Growth Super Fund

AUM (Cr)

₹12,581

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 17.79 14.45 13.18 %

View Fund

High Growth Fund

AUM (Cr)

₹10,929

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 29.3 22.69 17.8 %

View Fund

Opportunities Fund

AUM (Cr)

₹35,507

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 21.9 16.66 14.7 %

View Fund

Accelerator Mid-Cap Fund II

AUM (Cr)

₹5,476

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 21.13 14.65 14.53 %

View Fund

Multi Cap Fund

AUM (Cr)

₹8,754

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 25.94 22.89 20.52 %

View Fund

Pension India Consumption Fund

AUM (Cr)

₹9

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 20.5 15.5 %

View Fund

Growth Opportunities Plus Fund

AUM (Cr)

₹1,006

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 19.85 16.38 14.74 %

View Fund

Classic Opportunities Fund

AUM (Cr)

₹13,497

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 19.14 15.63 13.47 %

View Fund

Flexi Cap

AUM (Cr)

₹1,104

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 19.71 14.94 12.77 %

View Fund

Equity Top 250 Fund

AUM (Cr)

₹523

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 17.19 13.95 11.62 %

View Fund

Asset Allocation

AUM (Cr)

₹264

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 10.39 11.21 10.88 %

View Fund

Whole Life Income Fund

AUM (Cr)

₹823

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.99 7.75 7.56 %

View Fund

Debt Fund

AUM (Cr)

₹480

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.63 7.91 7.4 %

View Fund

Individual Preserver Pension Fund

AUM (Cr)

₹151

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.43 7.37 7.21 %

View Fund

Bond Fund

AUM (Cr)

₹122

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 6.02 7.12 7.13 %

View Fund

Steady Money Fund

AUM (Cr)

₹76

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.54 7.31 7.11 %

View Fund

Dynamic Gilt Fund

AUM (Cr)

₹189

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 4.88 7.15 6.98 %

View Fund

Bond Fund

AUM (Cr)

₹18,605

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.45 7.22 6.93 %

View Fund

Income Fund

AUM (Cr)

₹7,201

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.02 6.97 6.92 %

View Fund

Debt Fund

AUM (Cr)

₹91

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.4 7.35 6.89 %

View Fund

Whole Life Aggressive Growth Fund

AUM (Cr)

₹883

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 19.83 17.53 15.44 %

View Fund

Balanced Fund

AUM (Cr)

₹354

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 13.46 12.07 10.68 %

View Fund

Save N Grow Money Fund

AUM (Cr)

₹64

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 11.14 10.59 10.18 %

View Fund

Balanced Fund

AUM (Cr)

₹5,437

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.59 11.19 10.12 %

View Fund

Creator

AUM (Cr)

₹478

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 11.37 10.81 10.08 %

View Fund

Balanced Fund

AUM (Cr)

₹22,111

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 11.24 10.78 10 %

View Fund

Asset Allocation Fund II

AUM (Cr)

₹278

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.45 10.72 9.92 %

View Fund

Balancer II

AUM (Cr)

₹821

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.51 11.03 9.88 %

View Fund

Growth Fund

AUM (Cr)

₹7,378

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.03 10.87 9.84 %

View Fund

Multi Cap Balanced Fund

AUM (Cr)

₹1,915

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.97 10.86 9.67 %

View Fund

Super Select Equity Fund

AUM (Cr)

₹1,295

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 18.34 15.27 13.75 %

View Fund

Pure Stock Fund

AUM (Cr)

₹7,238

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 17.74 14.8 13.62 %

View Fund

Pure Equity

AUM (Cr)

₹2,922

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 17.43 14.89 13.28 %

View Fund

What is an SIP?

A Systematic Investment Plan (SIP) is a method of investing in mutual funds. It allows you to invest a fixed amount regularly, such as weekly, monthly, or quarterly, rather than a lump sum at once. SIPs promote disciplined investing and help average out market volatility through rupee cost averaging. They are especially suited for salaried individuals or investors looking for long-term wealth creation through consistent contributions.

Insurance Companies
Mutual Funds

Fund Name	5 Years	7 Years	10 Years
	Returns
Top 300 Fund SBI Life Rating	15.78%	13.6%	12.42% View Plan
Opportunities Fund HDFC Life Rating	21.9%	16.66%	14.7% View Plan
High Growth Fund Axis Max Life Rating	29.3%	22.69%	17.8% View Plan
Pension India Consumption Fund ICICI Prudential Life Rating	20.5%	-	15.5% View Plan
Multi Cap Fund Tata AIA Life Rating	25.94%	22.89%	20.52% View Plan
Accelerator Mid-Cap Fund II Bajaj Life Rating	21.13%	14.65%	14.53% View Plan
Multiplier Birla Sun Life Rating	23.51%	17.02%	15.85% View Plan
Pension Mid Cap Fund PNB MetLife Rating	31.41%	24.68%	18.41% View Plan
Equity II Fund Canara HSBC Life Rating	16.82%	12.4%	10.88% View Plan
US Equity Fund Star Union Dai-ichi Life Rating	14.69%	-	13.87% View Plan

Fund rating powered by

Last updated: Oct 2025

Compare more funds

Fund Name	3 Years	5 Years	10 Years
	Returns
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

Buying the Dip Results in Higher Returns

What is a Mutual Fund?

A mutual fund is an investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. These funds are managed by professional fund managers and come with various risk-return profiles. Mutual funds can be actively or passively managed and are available in equity, debt, hybrid, and other specialised categories. You can invest in a mutual fund either via SIP or as a lump sum.

Difference Between SIP vs Mutual Fund

Feature	SIP (Systematic Investment Plan)	Mutual Fund
Basic Definition	A method of investing small, recurring amounts in mutual funds	An investment vehicle that pools money for market exposure
Investment Form	Invests in equity, debt, or hybrid mutual funds	Invests in equity, debt, or hybrid mutual funds
Market Volatility Impact	Lower impact due to staggered investing	Higher impact due to market timing and large investment
Charges	Lower charges; smaller trade value and fund manager fee	Higher AMC and transaction charges due to larger investment
Redemption Charges	Generally lower redemption costs	Higher redemption charges
Liquidity	High liquidity	High liquidity
Risk Level	Market risks apply, but volatility is averaged out	Market risks apply; timing plays a key role
Tax Benefits	Eligible under Section 80C (up to ₹1.5 lakh per year)	Eligible under Section 80C (up to ₹1.5 lakh per year)
Investment Value	Smaller, budget-friendly amounts	Larger capital commitment required

Start An Sip Today Watch Your Money Grow

Key Takeaways - SIP vs Mutual Fund

SIP is a way to invest in a mutual fund, not a separate product.
Mutual Funds are investment products, while SIP is an investment method.
SIP allows budget-friendly, recurring contributions, ideal for salaried individuals.
Mutual Funds via lump sum can benefit from market rallies but carry higher market timing risk.
Both are subject to market risk and offer tax-saving benefits under Section 80C.

Advantages of Investing in SIP

Disciplined Saving Habit: Automates your investment journey and promotes financial discipline.
Rupee Cost Averaging: Buys more units when prices are low and fewer when high, lowering the average cost.
Power of Compounding: Long-term best SIP plans can lead to significant corpus due to compounding.
Budget-Friendly: Start investing with amounts as low as ₹500 per month.
Less Stress on Market Timing: You don’t have to worry about investing at the right time.
Calculate the returns: You can use the SIP calculator to calculate the returns on your investments

Start Small & Build Your Wealth For A Brighter Tomorrow

Advantages of Investing in Mutual Fund

Quick Deployment: A good option for investing windfall gains or bonuses.
Diversification: Access to a variety of asset classes through a single fund.
Professional Management: Your investments are handled by expert fund managers.
Choice of Funds: A wide range of equity, debt, hybrid, and sector-specific funds available.

Conclusion

Choosing between SIP and mutual fund investment depends on your investment style and financial readiness. If you prefer disciplined, small-ticket investing with reduced market timing risks, SIP is ideal. Knowing how they differ empowers you to make more informed and goal-oriented financial decisions.

FAQs

Which is better: SIP or Lump Sum investment in a Mutual Fund?
There isn't a universally "better" option; it depends on your financial situation, market outlook, and risk tolerance:
- SIP is generally preferred for: Long-term goals, beginners, those with limited lump sum capital, and during volatile or uncertain market conditions (due to rupee cost averaging).
- Lump Sum is generally preferred for: Investors with a large sum of money available and a strong belief that the market is at a low point and likely to rise significantly in the short term. However, it carries higher market timing risk.
Can I stop my SIP anytime?

Yes, you can typically stop or pause your SIP at any time without penalty. You will retain the units you have already purchased. However, it's advisable to inform the fund house or your distributor in advance as per their procedures.
How do SIPs help in achieving specific financial goals like retirement or a child's education?

SIPs are an excellent tool for goal-based investing due to their disciplined and compounding nature. By linking a specific SIP to a financial goal (e.g., ₹5,000/month for your child's higher education, ₹10,000/month for retirement), you create a consistent savings habit. Over the long term, the power of compounding allows your regular, small investments to grow substantially, making seemingly distant goals achievable. It also helps in maintaining focus and avoiding impulsive withdrawals.

Difference Between SIP and Mutual Fund

Best SIP Funds

What is an SIP?

What is a Mutual Fund?

Difference Between SIP vs Mutual Fund

Key Takeaways - SIP vs Mutual Fund

Advantages of Investing in SIP

Advantages of Investing in Mutual Fund

Conclusion

FAQs

Which is better: SIP or Lump Sum investment in a Mutual Fund?

Can I stop my SIP anytime?

How do SIPs help in achieving specific financial goals like retirement or a child's education?

SIP plans articles

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