Start SIP in Best Mutual Fund Plans

You can initiate the journey of financial growth by starting an SIP in the best mutual fund^^ plans. The SIP, or Systematic Investment Plan allows you to systematically invest small amounts at regular intervals to build a corpus in the long term. This article will help you to explore the best mutual fund plans tailored to your investment goals.

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SIP 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 80 C
Zero LTCG Tax
Zero LTCG Tax^ (Unlike 10% in Mutual Funds)
Disciplined & worry-free investing
Disciplined & worry-free investing

Best Mutual Fund Plans in 2024 in India

Best SIP Plan in Mutual Funds Fund Size (in Rs.) 3-Year Returns 5-Year Returns 7-Year Returns
EQUITY MUTUAL FUNDS
Quant Active Fund Rs. 6,681 crores 31.6% 26.71% 23.69%
Quant Large and Mid Cap Fund Rs. 1.296 crores 28.76% 22.46% 22.57%
Parag Parikh Flexi Cap Fund Rs. 48,294 crores 24.6% 23.59% 20.07%
Quant Focused Fund Rs. 481 crores 26.88% 20.51% 20.65%
Edelweiss Large and Mid Cap Fund Rs. 2,437 crores 24.19% 19.83% 17.86%
DEBT MUTUAL FUNDS
ICICI Prudential Savings Fund  Rs. 22063 crores 5.40% 6.75% 7.60%
ICICI Prudential Gilt Fund Rs. 4399 crores 5.85% 8.28% 9.48%
ICICI Prudential Corporate Bond Fund Rs. 2446 5.66% 7.59% 8.09%
ICICI Prudential Banking & PSU Debt Fund Rs. 8295 crores 5.70% 7.48% 8.18%
ICICI Prudential Long Term Bond Fund Rs. 649 3.42% 6.73% 8.70%
HYBRID MUTUAL FUNDS
Bank of India Mid & Small Cap Equity & Debt Fund Rs. 558 crores 26.29% 20.11% --
JM Aggressive Hybrid Fund Rs. 110.45 crores 21.65% 16.84% 14.16%
SBI Equity Savings Fund Rs. 3245 crores 11.40% 11.12% --
HDFC Balanced Advantage Fund Rs. 68,386 crores 25.04% 17.97% 17.11%
UTI Multi Asset Allocation Fund Rs. 980 crores 14.97% 12.42% 10.64%
SOLUTION-ORIENTED MUTUAL FUNDS
SBI Magnum Children’s Benefit Fund Rs. 1387 crores 37.07% -- --
ICICI Prudential Child Care Fund - Direct Plan Rs. 1,062 crores 17.97% 14.03% 15.25%
ICICI Prudential Retirement Fund - Pure Equity Plan Rs. 422 crores 27.81% -- --
Nippon India Retirement Fund - Wealth Creation Scheme Rs. 2713 crores 21.33% 13.61% --
Tata Young Citizens Fund Rs. 307 19.75% 16.69% 14.05%

*The information provided in this table is for educational purposes only.

What is SIP in Mutual Funds?

SIP, or Systematic Investment Plan is a popular way to invest in mutual funds in India. It allows you to invest a fixed amount of money at regular intervals, such as monthly, quarterly, or annually, in a chosen mutual fund scheme. It is like putting money into your mutual fund piggy bank on a set schedule.

Features and Benefits of SIP in Mutual Funds

benefits-sip benefits-sip

Following are some of the key features of SIP in mutual funds in 2024 in India:

  • Regular Investment: SIP allows you to make regular, fixed investments at predetermined intervals.

  • Flexible Investment Amounts: You can choose the amount you want to invest, making it flexible to suit your individual budget.

  • Rupee Cost Averaging: SIP helps average out the cost of units over time, reducing the impact of market volatility on investments.

  • Power of Compounding: SIP harnesses the compounding effect, as returns are reinvested, leading to potential long-term wealth creation.

  • Auto-Debit Facility: Funds are automatically debited from your account, promoting discipline in regular investing.

  • Affordability: SIPs are affordable, making mutual fund investments accessible to a wide range of investors.

  • Professional Fund Management: Funds are managed by professional fund managers, leveraging their expertise for optimal returns.

  • Liquidity: You can redeem units partially or fully at any time, providing liquidity as needed.

  • Goal-Based Investing: SIPs can be aligned with specific financial goals, such as education or retirement planning.

  • Tax Benefits: Equity Linked Savings Scheme (ELSS) SIPs offer tax benefits under Section 80C of the Income Tax Act.

How Do SIPs in Mutual Funds Work?

Here is how investing through the SIP method in mutual funds works:

  • Regular Investments: You commit to investing a fixed amount at regular intervals.

  • Flexible Amounts: You can choose the amount you want to invest in each instalment.

  • Automated Transactions: Investments are automatically deducted from the investor's bank account.

  • Net Asset Value (NAV): The investment amount buys units at the current NAV.

  • Rupee Cost Averaging: SIP helps average out the cost of buying units over time, reducing the impact of market volatility.

  • Professional Management: Skilled fund managers handle the investment portfolio.

  • Long-Term Approach: SIP encourages a disciplined, long-term investment strategy.

  • Potential for Compounding: Reinvested dividends and capital appreciation contribute to compounded returns.

  • Liquidity: You can redeem units at the prevailing NAV, providing liquidity.

  • Risk Mitigation: Systematic investment reduces the impact of market fluctuations on overall investment.

  • Goal-Oriented: You can use SIPs to work towards specific financial goals like child education, retirement planning, and marriage financing. You can use SIP calculator online tool to get an estimate of your SIP returns before investing.

How to Start SIP in Best Mutual Fund Plans in India in 2024

Follow the steps mentioned below to start a SIP in the best mutual fund plan:

  1. Organize Your Documents:

    • Gather essential documents: ID Proof, PAN Card, and Address Proof.

    • Verify bank account details and ensure compliance with KYC rules.

    • Keep a copy of your passport or driving license if investing in instruments other than cash.

  2. Complete KYC Requirements:

    • Fill out a KYC application form at an authorized bank or post office.

    • Alternatively, complete KYC online by providing personal details, photo ID proofs, and investment preferences.

  3. Register with a Broker or Financial Advisor:

    • Sign up with an Indian broker or financial advisor of your choice.

    • Once registered, explore various SIP investment plans based on your requirements and risk tolerance.

  4. Choose the Right Investment Plan:

    • Assess your risk tolerance, desired number of units, and investor type.

    • Select a SIP plan that aligns with your financial goals and preferences.

  5. Determine Investment Amount:

    • Decide the monthly or weekly investment amount based on your financial objectives.

    • Consider your liquidity needs and the overall value of the investment.

  6. Select a Convenient SIP Date:

    • Choose a date that suits your convenience for initiating SIP transactions.

    • You can select different dates for various SIPs within the same month.

  7. Submit the Application Form:

    • Submit your SIP application form online or offline, depending on the fund house.

    • If applying online, complete the ADF and submit it through your existing Demat account or opt for e-mandate/billpay/e-nach payment options.

  8. Start Investing:

    • Begin your SIP investment journey, either through automatic deposits or manual submissions.

    • Utilize online platforms or visit the bank to ensure a hassle-free submission process.

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Important Points to Consider to Start SIP in Best Mutual Fund Plans in 2024

The key points to keep in mind while starting an SIP in a mutual fund plan in India are as follows:

  • Strategic Planning for 2024: Align your SIP with your financial goals for the upcoming year.

  • Research Mutual Funds: Explore and understand the best mutual fund options available for 2024.

  • Risk Assessment: Evaluate your risk tolerance to choose funds that match your comfort level.

  • Diversification: Opt for a diversified portfolio to spread risk across various assets.

  • Fund Performance: Analyze past performance records to gauge the fund's consistency.

  • Expense Ratio: Consider funds with lower expense ratios to maximise returns.

  • Fund Manager’s Track Record: Research and review the fund manager's track record for a confident investment.

  • Investment Horizon: Determine the time frame for your investment to select appropriate funds.

  • Emergency Fund: Ensure you have an emergency fund in place before starting SIP for added financial security.

  • Regular Monitoring: Stay updated on market trends and adjust your SIP as needed.

  • Continuous Learning: Stay informed about financial markets and investment strategies for informed decision-making.

  • Review and Adjust: Periodically review your SIP and make adjustments based on changing financial goals or market conditions.

Summing It Up

Starting a Systematic Investment Plan (SIP) in the best mutual fund plans is a prudent financial decision. This disciplined approach to investing offers the potential for long-term wealth creation, capitalising on the power of compounding. By carefully selecting top-performing mutual funds and consistently contributing over time, you can navigate market fluctuations and work towards achieving your financial goals with confidence.

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FAQ's

  • Which mutual fund is best for SIP?

    Here are 5 mutual funds that are considered good for SIP in India, based on their historical performance and risk-adjusted returns:
    • Quant Tax Plan Direct-Growth

    • Parag Parikh Flexi Cap Fund

    • HDFC Mid-Cap Opportunities Fund Direct Plan

    • Axis Bluechip Fund

    • Canara Robeco Emerging Equities Fund

  • Which SIP gives 15% return?

    Best SIP plans that have historically performed well are listed below:
    • Quant Active Fund

    • Quant Large & Mid Cap Fund

    • Parag Parikh Flexi Fund

    • PGIM India Flexi Cap Fund

    • Kotak Equity Opportunities Fund

  • Can I invest 1000 ₹ per month in SIP?

    Yes, you can definitely invest Rs. 1000 per month in a SIP plan. Starting a SIP with Rs. 1000 is a great way to begin your investment journey, regardless of your income or financial goals.
  • Which SIP gives the highest return in 5 years?

    Based on past performance, here are 5 SIP plans that have delivered high returns in the past 5 years:
    • Quant Active Fund Direct-Growth

    • Quant Large & Mid Cap Fund Direct-Growth

    • Parag Parikh Flexi Cap Fund Direct-Growth

    • PGIM India Flexi Cap Fund Direct-Growth

+For Mutual Fund midcap category Returns https://www.morningstar.in/tools/mutual-fund-category-performance.aspx & for Insurance midcap fund category Returns- https://www.morningstar.in/tools/insurance-fund-category-performance.aspx
*Past 10 Year annualised returns as on 01-12-2023
*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.
~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.

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