SIP plans for 7 years, 15 years, 20 years, or so are proving to be more beneficial in terms of returns when compared to any government backed investment plan or scheme. It is important to know that government schemes do not involve any risk whereas the SIPs are more suitable for moderate risk taking investors.
Let us understand in detail the Systematic Investment Plans, how they work, their features and benefits, and what are the best SIP plans for 7 years in India.
What Is SIP?
Systematic Investment Plan or SIP is one of the ways of investing in Mutual Funds, the other way being the lump sum method of investment. SIPs are offered by various banks, financial institutions, and mutual fund houses and are a reliable source of investment for the long term. one of the reasons why SIPs have gained more popularity when compared to the lump sum method is that a fixed amount is deposited in a SIP scheme of the investors’ choice at regular intervals for a pre-defined tenure. Systematic Investment Plans have proved to offer great returns if investments are made wisely with intensive research.
Features of SIP
Here are the top features of SIP and why one should consider investing in a SIP investment option compared to other investment options:
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SIP is an investment plus savings plan
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With regular investments under the SIP, a savings habit is inculcated amongst the investors.
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Installments under SIP can be weekly, monthly, or quarterly as per the convenience of the investor.
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Monthly installments can be as low as Rs. 500 in the case of some Systematic Investment Plan schemes.
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SIP is considered to be very helpful in managing the financial burden during a crisis situation.
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It helps in building a decent financial corpus after retirement
Top Performing SIP Funds in India
| Fund Name |
1 year CAGR |
3 year CAGR |
5 year CAGR |
Till Date CAGR |
| ICICI Prudential Bluechip Fund (G) |
17.70% |
19.30% |
14.40% |
14.60% |
| Axis Bluechip Fund (G) |
11.10% |
18.60% |
17.30% |
13.10% |
| Kotak Bluechip fund (G) |
14.60% |
19.80% |
14.10% |
- |
| Mirae Asset Large Cap Fund (G) |
14.40% |
18.30% |
15.10% |
15.90% |
| ICICI Prudential Bluechip Fund Institutional I (G) |
-19.70% |
0.20% |
4.40% |
11.70% |
| DSP Top 100 Equity Fund (G) |
9.60% |
14.90% |
10% |
19.30% |
| Invesco India largecap Fund (G) |
19.90% |
18.10% |
14% |
12.60% |
| Aditya Birla Sun Life Frontline Equity Fund Trigger Facility (G) |
15.80% |
17.80% |
12.60% |
19.80% |
| BNP Paribas Large Cap Fund (G) |
12.60% |
19.70% |
14.40% |
16.30% |
| LIC MF Large Cap Fund (G) |
15.30% |
18.60% |
13.20% |
10.80% |
| L&T India Large Cap Fund (G) |
12.20% |
17.30% |
12.60% |
10.10% |
| Canara Robeco Bluechip Equity Fund (G) |
13.30% |
21.70% |
16.50% |
13.10% |
| Edelweiss Large Cap Fund C (G) |
12.50% |
17.60% |
14.50% |
14% |
| SBI Bluechip Fund (G) |
11.30% |
19.30% |
13.20% |
11.80% |
| IDFC Nifty Fund (G) |
14.80% |
18.40% |
15.30% |
11.60% |
| UTI Mastershare Unit (G) |
16.70% |
19.30% |
14.60% |
15.90% |
| HSBC Large Cap Equity Fund (G) |
11.30% |
18.10% |
13.20% |
19.70% |
| Edelweiss Large Cap Fund B (G) |
12.40% |
17.60% |
14.50% |
14.10% |
| Nippon India Large Cap Fund (G) |
18.30% |
16.60% |
13.40% |
11.70% |
| Tata Large Cap Fund (G) |
15.90% |
18% |
12.90% |
19.70% |
Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer. The tax benefit is subject to changes in tax laws. *Standard T&C Apply
Why Invest in Systematic Investment Plans?
SIP investment is considered as one of the smartest investment options these days if an investor does not want to engage in high risk-taking investments and at the same time wishes to create a financial corpus after retirement. Here are some reasons why investing in a SIP will work wonders for you in the long term future:
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Higher Returns
If the investor studies the history of a mutual fund carefully before buying SIPs and purchases them accordingly, higher returns are guaranteed after a significant time period, say 12 years. The top-performing SIPs these days have shown a remarkable growth of 10% to sometimes even more than 12% in a span of 5 years or 7 years which is way more than any other investment option available in the market.
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Rupee Cost Averaging
Due to the market volatility rupee cost averaging allows investors to buy:
For better results, an investor needs to smartly diversify their portfolio by investing in multiple shares at a lower cost rather than putting all their money in just one share.
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Affordable
Systematic Investment Plans are considered affordable as one can invest an amount as low as Rs. 500 monthly. These regular investments as per the investors’ wish and affordability, do not cause a hole in their pocket unlike in the case of the Lump Sum method of investment where the investor deposits the complete amount at once.
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Portfolio Diversification
A SIP investor can put their money in multiple SIP plans for 20 years or 10 years instead of putting all the money in just 1 investment option. This kind of investment helps in the portfolio diversification of the investor and also increases the probability of better and higher returns after the long term period.
In The End!
It is easy to invest in a mutual fund of your own choice these days just by a few clicks on your laptop or mobile phone. Considering it an easily available investment option, the investor needs to have a piece of in-depth knowledge about the SIP they planning to purchase. SIP calculator online tool can be used to analyse the SIP returns. From low risk to high risk, from short term to long term, every SIP is available in the market but the question arises as to what factors should be taken into consideration before making the buy? So, an investor should always:
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Understand the reputation of the fund house before investing
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The net asset value
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The return history of the selected SIP (Systematic Investment Plan)
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The risk involved in the SIP
