Overview of a SIP Plan
A Systematic Investment Plan (SIP) is a smart and hassle-free way to invest in mutual funds and market-linked insurance plans. It allows you to invest a fixed amount regularly, helping you grow your money for long-term goals like retirement or education. A SIP calculator is a helpful tool to estimate your maturity amount from the monthly/ lumpsum SIP investments.
Now, before learning how to start a SIP investment in India, let us briefly discuss how a SIP works.
- Insurance Companies
- Mutual Funds
|
Returns |
| Fund Name |
5 Years |
7 Years |
10 Years |
| Axis Max Life |
32.5% |
21.1% |
|
| Tata AIA Life |
30.5% |
21% |
|
| Bajaj Allianz |
20.54% |
12.55% |
|
| HDFC Life |
22.14% |
14.59% |
|
| Canara HSBC Life |
16.61% |
9.87% |
|
| Bharti AXA |
17.56% |
13.27% |
|
| Birla Sun Life |
22.24% |
14.41% |
|
| ICICI Prudential Life |
19.96% |
13.09% |
|
| LIC India |
10.44% |
- |
|
| PNB MetLife |
20.57% |
16.06% |
|
Fund rating powered by
Last updated: Jul 2025
| |
Returns |
| Fund Name |
3 Years |
5 Years |
10 Years |
| QUANT |
23.92% |
31.48% |
|
| PARAG PARIKH |
20.69% |
26.41% |
|
| EDELWEISS |
22.34% |
24.29% |
|
| KOTAK |
24.64% |
25.01% |
|
| MIRAE ASSET |
19.74% |
24.32% |
|
| PGIM INDIA |
14.75% |
23.39% |
|
| DSP |
18.41% |
22.33% |
|
| CANARA ROBECO |
20.05% |
21.80% |
|
| SUNDARAM |
18.27% |
18.22% |
|
How does a SIP Work?
The following example will help you to understand the workings of a SIP plan:
-
Suppose you choose to invest in the Nippon India Small Cap Fund with the following SIP investments:
-
Monthly Investment: ₹5,000
-
Fund NAV (Net Asset Value): Varies each month
-
Investment Duration: 6 months
-
You allow the automatic deduction facility from your bank account for the decided amount on a fixed date.
-
Your SIP returns will increase due to rupee-cost averaging and power of compounding, as per the following:
|
Month
|
NAV (₹)
|
Amount Invested (₹)
|
Units Purchased
|
Total Units Purchased
|
Value at End of 6 Months (₹)
|
|
1
|
50
|
5,000
|
= 5000/50 = 100
|
100
|
-
|
|
2
|
55
|
5,000
|
= 5000/55 = 90.91
|
190.91
|
-
|
|
3
|
52
|
5,000
|
= 5000/52 = 96.15
|
287.06
|
-
|
|
4
|
58
|
5,000
|
= 5000/58 = 86.21
|
373.27
|
-
|
|
5
|
54
|
5,000
|
= 5000/54 = 92.59
|
465.86
|
-
|
|
6
|
56
|
5,000
|
= 5000/ 54 = 89.29
|
554.15
|
= 554.15 x 56
= 31,032.40
|
-
Total Investment: ₹30,000
-
Value at the end of 6 Months: ₹31,032.40
-
Profit: ₹1,032.40 (in 6 months)
SIP Calculator
Monthly Investment
₹22.4 L
Top Funds with High Returns (Past 7 Years)
18.6%
High Growth Fund
18.2%
Top 200 Fund
14.17%
Accelerator Mid-Cap Fund II
13.85%
Opportunities Fund
9.9%
Equity II Fund
12.97%
Accelerator Fund
13.89%
Growth Opportunities Plus Fund
14.88%
Multiplier
10.87%
Equity Top 250 Fund
11.83%
Future Opportunity Fund
12.01%
Opportunities Fund
13.44%
Frontline Equity Fund
14.25%
Virtue II
10.57%
Pension Dynamic Equity Fund
11.94%
Equity Optimiser Pension
9.72%
Blue-Chip Equity Fund
How to Invest in SIP for Beginners?
To invest in a Systematic Investment Plan as a beginner, you can choose between online and offline methods.
The following steps will help you to learn about how to start a SIP investment in India through both online and offline modes:
-
How to Invest in SIP Online Mode
-
Step 1: Define Your Investment Goals: Clarify your financial objectives (such as retirement or buying a house) and assess your risk tolerance through the online tools or questionnaires available on the AMC or broker's website.
-
Step 2: Prepare Digital Documents: Keep scanned copies of your PAN card, Aadhar, proof of address, and bank details ready for easy upload during the registration process.
-
Step 3: Complete KYC Process: Use your bank's app or the AMC's online portal to submit your KYC documents for identity and address verification.
-
Step 4: Register for SIP Online: Visit the official website or mobile app of your chosen AMC or broker, create an account, and complete the SIP registration by filling out the necessary forms.
-
Step 5: Choose a Mutual Fund: Browse available mutual funds on the website, check key details like risk profile, returns, and fund manager history, and select one that matches your investment goals.
-
Step 6: Set SIP Amount & Frequency: On the AMC or broker’s platform, specify how much you want to invest and choose the frequency (e.g., monthly or quarterly) for your SIP.
-
Step 7: Authorize Auto-Debit: Use the e-mandate facility on the online platform to link your bank account and authorize automatic deductions for your SIP payments.
-
Step 8: Confirm and Submit: After reviewing all the details, confirm your SIP registration and submit the form electronically. You will receive a confirmation email.
-
How to Invest in SIP Offline Through Broker/ AMC Offices
-
Step 1: Set Your Financial Goals: Discuss your investment objectives (such as saving for a child's education or buying property) with a financial advisor at the AMC or broker's office.
-
Step 2: Gather Physical Documents: Collect physical copies of your PAN card, Aadhar card, proof of address (e.g., utility bills), and bank account details to submit in person.
-
Step 3: Complete KYC Verification: Visit the AMC or KYC registration center in person to complete the KYC process by submitting your documents for verification.
-
Step 4: Fill Out the SIP Form: Obtain the SIP registration form from the AMC or broker office, fill it out manually, and submit it with the required documents.
-
Step 5: Select Your Mutual Fund Scheme: Sit with an advisor at the AMC or broker’s office to explore available mutual fund schemes. Discuss the fund’s performance, risks, and suitability based on your goals.
-
Step 6: Decide on SIP Amount & Frequency: At the office, decide the amount you want to invest and how often (monthly, quarterly) based on your financial capacity and goals.
-
Step 7: Set Up Auto-Debit: Complete the required paperwork at the AMC or broker’s office to set up auto-debit instructions for regular SIP payments from your bank.
-
Step 8: Submit the Completed Form: Hand over the completed SIP form, along with your KYC documents, at the AMC or broker office. They will process your request and send a confirmation.
Investment Tips for How to Invest in SIP
The following points or tips are advised by the investment experts to consider for investing in a best SIP plan:
-
Use a SIP Calculator: Use an SIP calculator to estimate returns and figure out how much to invest each month.
-
Set Clear Financial Goals: Define what you're investing for, like retirement, an emergency fund, or a major purchase.
-
Know Your Investment Horizon: Decide how long you want to invest. Longer horizons can handle higher risk.
-
Understand Your Risk Appetite: Choose investments based on how much risk you can take. Younger investors can afford higher risk.
-
Research Fund Performance: Check a fund’s past performance and returns before investing.
-
Evaluate Fund Manager’s Experience: A skilled fund manager can improve your chances of good returns.
-
Understand Fees: Know the fund's expense ratio, exit load, and other fees to ensure they don’t eat into your returns.
-
Invest 50% in Equities: Put half of your SIP in equity funds for growth, while balancing with safer options.
-
Be Patient: Don’t rush during market fluctuations. Long-term patience pays off.
-
Stay Invested for Longer: Longer investment periods lead to higher returns as market swings balance out.
-
Avoid Frequent Fund Switching: Switching funds too often increases costs and reduces returns. Stick with your plan.
-
Build a Balanced Portfolio: Diversify across different fund types to reduce risk and smooth returns.
Wrapping It Up
In conclusion, learning how to invest in a SIP is easy and can lead to long-term financial growth. You need to start by choosing a goal, selecting the right mutual fund, and deciding your investment amount and duration. You can automate your payments for consistency and track your progress regularly. With discipline and patience, SIPs can help you build wealth and achieve your financial goals.
