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

Whole Life Mid Cap Equity Fund

AUM (Cr)

₹11,620

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 15.84 17.48 16.86 %

View Fund

Instant tax receipt

Large Cap Equity Fund

AUM (Cr)

₹2,687

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 11.99 14.42 14.55 %

View Fund

Instant tax receipt

Virtue II

AUM (Cr)

₹3,237

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.62 14.79 14.27 %

View Fund

Instant tax receipt

Opportunities Fund

AUM (Cr)

₹35,377

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.46 13.27 13.71 %

View Fund

Instant tax receipt

Grow Money Plus Fund

AUM (Cr)

₹446

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 9.93 11.99 13.61 %

View Fund

Instant tax receipt

Frontline Equity Fund

AUM (Cr)

₹4,837

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 11.85 12.82 13.36 %

View Fund

Instant tax receipt

Accelerator Mid-Cap Fund II

AUM (Cr)

₹5,458

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.3 11.53 13.26 %

View Fund

Instant tax receipt

Accelerator Fund

AUM (Cr)

₹219

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.52 12.83 12.95 %

View Fund

Instant tax receipt

Diversified Equity Fund

AUM (Cr)

₹3,598

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 9.61 11.29 12.78 %

View Fund

Instant tax receipt

Pure Stock Fund

AUM (Cr)

₹7,314

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 11.3 12.21 12.62 %

View Fund

Instant tax receipt

Large Cap Equity Fund

AUM (Cr)

₹2,687

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 11.99 14.42 14.55 %

View Fund

Virtue II

AUM (Cr)

₹3,237

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.62 14.79 14.27 %

View Fund

Grow Money Plus Fund

AUM (Cr)

₹446

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 9.93 11.99 13.61 %

View Fund

Frontline Equity Fund

AUM (Cr)

₹4,837

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 11.85 12.82 13.36 %

View Fund

Accelerator Fund

AUM (Cr)

₹219

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.52 12.83 12.95 %

View Fund

Diversified Equity Fund

AUM (Cr)

₹3,598

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 9.61 11.29 12.78 %

View Fund

Pure Stock Fund

AUM (Cr)

₹7,314

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 11.3 12.21 12.62 %

View Fund

Future Apex Fund

AUM (Cr)

₹130

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 10.44 11.98 12.41 %

View Fund

Growth Super Fund

AUM (Cr)

₹12,241

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 8.86 10.46 12.06 %

View Fund

Top 300 Fund

AUM (Cr)

₹1,981

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 8.74 10.5 11.58 %

View Fund

Whole Life Mid Cap Equity Fund

AUM (Cr)

₹11,620

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 15.84 17.48 16.86 %

View Fund

Opportunities Fund

AUM (Cr)

₹35,377

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.46 13.27 13.71 %

View Fund

Accelerator Mid-Cap Fund II

AUM (Cr)

₹5,458

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 12.3 11.53 13.26 %

View Fund

Multi Cap Fund

AUM (Cr)

₹9,938

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 21 18.94 22 %

View Fund

High Growth Fund

AUM (Cr)

₹12,572

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 17.92 19.5 17.66 %

View Fund

Growth Opportunities Plus Fund

AUM (Cr)

₹1,051

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 11.39 13.08 14.13 %

View Fund

Classic Opportunities Fund

AUM (Cr)

₹13,553

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 10.64 11.82 12.52 %

View Fund

Flexi Cap

AUM (Cr)

₹1,125

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 11.85 11.77 12.21 %

View Fund

Opportunities Fund

AUM (Cr)

₹3,551

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 11.15 11.52 11.86 %

View Fund

Equity Top 250 Fund

AUM (Cr)

₹526

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 9.15 10.28 10.77 %

View Fund

Asset Allocation

AUM (Cr)

₹242

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 7.1 8.4 9.72 %

View Fund

Whole Life Income Fund

AUM (Cr)

₹823

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.66 6.84 7.3 %

View Fund

Debt Fund

AUM (Cr)

₹499

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.28 6.81 7.05 %

View Fund

Bond Fund

AUM (Cr)

₹117

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.98 6.58 6.94 %

View Fund

Steady Money Fund

AUM (Cr)

₹77

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.42 6.43 6.83 %

View Fund

Bond Fund

AUM (Cr)

₹16,781

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.29 6.29 6.64 %

View Fund

Dynamic Gilt Fund

AUM (Cr)

₹172

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 4.59 5.98 6.62 %

View Fund

Debt Fund

AUM (Cr)

₹93

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.2 6.45 6.62 %

View Fund

Secure Fund

AUM (Cr)

₹1,013

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.66 6.23 6.59 %

View Fund

Bond Fund

AUM (Cr)

₹1,602

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 5.33 6.01 6.48 %

View Fund

Whole Life Aggressive Growth Fund

AUM (Cr)

₹904

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 13.39 14.82 14.84 %

View Fund

Balanced Fund

AUM (Cr)

₹354

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 8.49 9.36 9.93 %

View Fund

Save N Grow Money Fund

AUM (Cr)

₹62

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 7.6 8.43 9.63 %

View Fund

Creator

AUM (Cr)

₹460

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 7.4 8.54 9.55 %

View Fund

Balanced Fund

AUM (Cr)

₹5,072

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 7.37 8.39 9.51 %

View Fund

Balanced Fund

AUM (Cr)

₹21,160

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 6.98 8.33 9.3 %

View Fund

Balancer II

AUM (Cr)

₹807

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 8.19 8.8 9.26 %

View Fund

Asset Allocation Fund II

AUM (Cr)

₹272

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 7.55 8.26 9.1 %

View Fund

Multi Cap Balanced Fund

AUM (Cr)

₹1,775

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 8.21 8.38 8.88 %

View Fund

Stable Fund

AUM (Cr)

₹17

Estimated Value

₹

After 5 years

Returns (p.a.)

+ 6.87 7.77 8.81 %

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	8.74%	10.5%	11.58% View Plan
Opportunities Fund HDFC Life Rating	12.46%	13.27%	13.71% View Plan
High Growth Fund Axis Max Life Rating	17.92%	19.5%	17.66% View Plan
Opportunities Fund ICICI Prudential Life Rating	11.15%	11.52%	11.86% View Plan
Multi Cap Fund Tata AIA Life Rating	21%	18.94%	22% View Plan
Accelerator Mid-Cap Fund II Bajaj Life Rating	12.3%	11.53%	13.26% View Plan
Multiplier Birla Sun Life Rating	14.41%	13.36%	14.8% View Plan
Virtue II PNB MetLife Rating	12.62%	14.79%	14.27% View Plan
Equity II Fund Canara HSBC Life Rating	8.27%	8.24%	9.76% View Plan
Blue-Chip Equity Fund Star Union Dai-ichi Life Rating	7.34%	8.34%	9.69% View Plan

Fund rating powered by

Last updated: Mar 2026

Compare more funds

Fund Name	AUM	Return 3 Years	Return 5 Years	Return 10 Years	Minimum Investment	Return Since Launch
Motilal Oswal BSE Enhanced Value Index Fund Regular - Growth	₹1,748.84 Crs	28.91%	N/A	N/A	₹500	28.94%
Bandhan Small Cap Fund Regular-Growth	₹20,474.12 Crs	26.07%	20.2%	N/A	₹1,000	25.81%
Motilal Oswal Midcap Fund Regular-Growth	₹33,689.20 Crs	17.76%	19.95%	15.5%	₹500	18.83%
ICICI Prudential Infrastructure Fund-Growth	₹8,097.89 Crs	20.26%	23.55%	17.35%	₹5,000	14.94%
Canara Robeco Large Cap Fund Regular-Growth	₹17,103.62 Crs	11.03%	9.6%	12.89%	₹100	11.61%
Mirae Asset Large Cap Fund Direct- Growth	₹40,184.41 Crs	10.21%	9.85%	13.44%	₹5,000	14.5%
Kotak Midcap Fund Regular-Growth	₹61,694.40 Crs	17.96%	16.27%	17.08%	₹100	14.06%
SBI Small Cap Fund-Growth	₹34,931.73 Crs	10.62%	13.02%	16.74%	₹5,000	17.62%
SBI Gold ETF	₹24,897.99 Crs	33.28%	25.87%	16.3%	₹5,000	13.46%

Updated as of Mar 2026

Compare more funds

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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