Top 5 Reasons Why You Should Consider Investing Through SIP for Higher Returns

The popularity of a Systematic Investment Plan (SIP) has increased tremendously in the last few years. As one of the disciplined and safest options of investment, most of the market experts suggest investing in mutual funds^^ through SIP. If we talk about long-term wealth accumulation and smart investment planning then equity investment has given far profitable returns as compared to the debt-based investment instrument.

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Invest
₹ 10,000
Invest for
AUM (Cr)

₹12,038

NAV

177.79

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 17.57 21.04 17.81 %

Instant tax receipt
AUM (Cr)

₹3,211

NAV

70.32

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 11.64 16.83 14.98 %

Instant tax receipt
AUM (Cr)

₹2,538

NAV

74.08

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 11.98 16.01 14.9 %

Instant tax receipt
AUM (Cr)

₹34,849

NAV

80.68

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 13.22 16.27 14.28 %

Instant tax receipt
AUM (Cr)

₹5,554

NAV

84.48

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 12.66 14.96 13.96 %

Instant tax receipt
AUM (Cr)

₹4,846

NAV

71.44

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 12.84 15.02 13.82 %

Instant tax receipt
AUM (Cr)

₹419

NAV

69.05

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 10.34 13.51 13.77 %

Instant tax receipt
AUM (Cr)

₹135

NAV

57.49

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 11.65 14.41 13.22 %

Instant tax receipt
AUM (Cr)

₹202

NAV

48.38

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 12.65 14.24 13.16 %

Instant tax receipt
AUM (Cr)

₹3,388

NAV

41.31

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 9.91 12.64 13.15 %

Instant tax receipt
AUM (Cr)

₹3,211

NAV

70.32

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 11.64 16.83 14.98 %

AUM (Cr)

₹2,538

NAV

74.08

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 11.98 16.01 14.9 %

AUM (Cr)

₹4,846

NAV

71.44

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 12.84 15.02 13.82 %

AUM (Cr)

₹419

NAV

69.05

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 10.34 13.51 13.77 %

AUM (Cr)

₹135

NAV

57.49

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 11.65 14.41 13.22 %

AUM (Cr)

₹202

NAV

48.38

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 12.65 14.24 13.16 %

AUM (Cr)

₹3,388

NAV

41.31

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 9.91 12.64 13.15 %

AUM (Cr)

₹3,206

NAV

71.07

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 10.22 13.88 12.83 %

AUM (Cr)

₹7,200

NAV

149.87

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 10.51 13.79 12.58 %

AUM (Cr)

₹1,903

NAV

56.27

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 8.91 11.59 11.62 %

AUM (Cr)

₹12,038

NAV

177.79

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 17.57 21.04 17.81 %

AUM (Cr)

₹34,849

NAV

80.68

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 13.22 16.27 14.28 %

AUM (Cr)

₹5,554

NAV

84.48

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 12.66 14.96 13.96 %

AUM (Cr)

₹10,835

NAV

67.54

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 21 21.59 22 %

AUM (Cr)

₹32

NAV

10.44

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 22 21.62 20 %

AUM (Cr)

₹1,050

NAV

76.75

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 12.53 15.2 14.67 %

AUM (Cr)

₹13,103

NAV

72.45

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 11.85 13.93 13.01 %

AUM (Cr)

₹3,473

NAV

61.52

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 13.3 12.8 12.6 %

AUM (Cr)

₹1,020

NAV

54.5

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 11.46 13.01 12.22 %

AUM (Cr)

₹503

NAV

56.93

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 8.95 11.69 10.99 %

AUM (Cr)

₹220

NAV

27.86

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 8.35 8.89 9.81 %

AUM (Cr)

₹829

NAV

42.53

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 6.28 6.79 7.4 %

AUM (Cr)

₹528

NAV

39.75

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 5.86 6.58 7.05 %

AUM (Cr)

₹72

NAV

43.1

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 6.14 6.44 6.96 %

AUM (Cr)

₹127

NAV

30.91

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 6.14 6.74 6.93 %

AUM (Cr)

₹6,522

NAV

33.52

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 5.45 5.94 6.73 %

AUM (Cr)

₹91

NAV

40.55

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 5.9 6.32 6.71 %

AUM (Cr)

₹16,422

NAV

51.94

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 5.88 6.23 6.71 %

AUM (Cr)

₹1,064

NAV

48.71

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 6.33 6.47 6.7 %

AUM (Cr)

₹156

NAV

48.77

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 5.41 5.77 6.67 %

AUM (Cr)

₹897

NAV

103.84

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 13.9 16.18 15.1 %

AUM (Cr)

₹348

NAV

49.39

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 9.25 10.47 10.16 %

AUM (Cr)

₹62

NAV

61.98

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 8.12 9.09 9.76 %

AUM (Cr)

₹4,662

NAV

40.75

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 8.14 9.57 9.72 %

AUM (Cr)

₹433

NAV

104.77

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 7.87 9.06 9.52 %

AUM (Cr)

₹19,882

NAV

73.57

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 7.56 8.96 9.43 %

AUM (Cr)

₹6,293

NAV

110.71

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 8.01 9.23 9.36 %

AUM (Cr)

₹751

NAV

39.8

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 8.39 9.48 9.35 %

AUM (Cr)

₹1,669

NAV

44.65

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 9.03 9.63 9.21 %

AUM (Cr)

₹254

NAV

31.59

Estimated Value

After 5 years After 7 years After 10 years
Returns (p.a.)

+ 7.97 9.32 9.12 %

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However, before investing through SIP in mutual funds it is important to know what is SIP?. Systematic Investment Plan (SIP) is a process/method through which  you can invest in mutual funds. SIP offers a planned approach to investment wherein the investors can invest a specific amount of money per month at the predetermined date.

Further in this article, we will elaborately discuss the top 5 reasons why you should consider investing through SIP for higher returns.

  1. Financial Discipline

    Most of the investors prefer investing through SIP Investment because of the benefit of maximizing profit. However, besides the advantage of wealth creation, the most important perk of investing through systematic investment plan is that it inculcates the habit of financial discipline in the investor’s life. With SIP, the investors are destined to invest a specific sum of money at a predetermined date regardless of the market conditions. As the amount of investment is auto-debited from the investor’s account, it simultaneously reduces the chance of missing out on investment . SIP  helps the investor in  creatinga financial backup by investing a small sum of money over a long period.

  2. Achieve Financial Objective

    To achieve the financial goals of life, it is significant to have smart financial planning. Whether one wants to make a short-term or long-term investment, SIP is a goal-oriented process of investment. The investors can start SIP by making a minimum monthly investment of Rs.500 and can invest up to the maximum as much as they want in any of the best sip plans. By making a small investment over a long-term period you can achieve your  financial goals in the expected time. Besides this, there are a lot of open-ended funds that offer liquidity. This allows the investors to withdraw their investment in case of an emergency.

  3. Offers the Benefit of Power of Compounding

    Through the benefit, of the power of compounding the investors can gain interest by reinvesting the interest earned. In the power of compounding the first investment made by the investors and the gained interest in it is used to earn the interest for the next period. One can also take the help of the SIP Calculator  to estimate the maximum return on investment. Therefore, the benefit of the power of compounding helps the investors to turn small investments into a large corpus. Hence, the early an individual starts making SIP investment, the larger wealth they can accumulate over a long-term period.

  4. Don’t Need to Time the Market

    Mostly, the market experts advise the investors, to invest when the market performs well. However, in the case of SIP, the investors do not need to worry about the timing of the market. Most of the investors often invest in stocks when the price is low and sell them when the price is high. Thus, timing the market is not only time consuming but also riskier. On contrary to this, by the advantage of rupee cost averaging one just need to invest a pre-determined amount continuously for a longer period. Since the amount invested by an individual is constant one can buy more units when the price is low and lesser units when the price is high which in result will lower the average cost.

    start-an-sip-today-watch-your-money-grow start-an-sip-today-watch-your-money-grow
    *All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
  5. Diversifies the Investment

    Investors who want to do smart financial planning should not keep all the eggs in the same basket. As per the market experts, the investors should allocate their money in diversified asset classes instead of putting all the money into one asset. The process of putting your money in different asset classes is known as diversification. By diversifying the investment and allocating the money in different investment securities reduces the risk of fluctuation in returns.  SIP offers the advantage of diversification. With the minimum investment of Rs.500, the investors get a bigger exposure to investing in different investment securities as per their suitability and requirement. It helps to reduce market risk and increases the chance of wealth creation.

    Once you are aware of the above information you can start your SIP investment.

SIP Calculator

I want to invest Pro Tip
Financial experts suggest that a person should invest 10-15% of their monthly income for long-term financial growth
/Month
I want to invest for Pro Tip
Financial experts suggest that individuals should ideally invest for a period of 5 to 10 years, or even longer, to maximize the benefits of compounding and navigate market fluctuations effectively
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Expected return Pro Tip
Top 25% of investors consistently generate more than 12% return
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Total Wealth ₹1.03 Cr
Start Investing
I want to save
I want to invest for Pro Tip
Financial experts suggest that individuals should ideally invest for a period of 5 to 10 years, or even longer, to maximize the benefits of compounding and navigate market fluctuations effectively
Years
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Expected return Pro Tip
Top 25% of investors consistently generate more than 12% return
% Annually
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Monthly Investment ₹22.4 L
Start Investing

How to Start SIP Investment?

Listed below are three simple steps to help you understand how to start SIP investment online:

  • Keep all the documents handy i.e. Address proof, PAN Card, Cheque book, Passport size photo

  • To start your SIP investment, another important step is to get your KYC done

  • Once your KYC is done you can register online through the fund house website and look for Register online or New Investor link

Once you get your KYC done you can invest in different funds by logging onto the website of the fund house with your username and password.

Wrapping it Up!

If you stay committed and invest regularly through SIP, then you will be able to achieve your short-term and long-term financial goals easily. With a systematic approach and flexibility of investment, SIP helps investors to achieve maximum ROI with minimum risk involved.  However, to gain maximum profit through SIP investment, it is also very important to have a proper understanding of the market and be aware of the funds' past performance.

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Invest ₹10K/Month & Get ₹1 Crore# Tax-Free*
*under 10(10D)

˜The insurers/plans mentioned are arranged in order of highest to lowest first year premium (sum of individual single premium and individual non-single premium) offered by Policybazaar’s insurer partners offering life insurance investment plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in
Disclaimer:#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. All SIPs listed here are of insurance companies’ funds. 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.
*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.
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
++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.
**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).

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