SIP Full Form
The full form of SIP is a Systematic Investment Plan.
- Insurance Companies
- Mutual Funds
|
Returns |
| Fund Name |
5 Years |
7 Years |
10 Years |
| Max Life |
27.23% |
21.04% |
|
| Tata AIA |
32.94% |
21.74% |
|
| Bajaj Allianz |
25.91% |
12.66% |
|
| HDFC Standard |
27.55% |
14.8% |
|
| Canara HSBC Oriental Bank |
21.16% |
10.67% |
|
| Bharti AXA |
22.39% |
14.55% |
|
| Birla Sun Life |
28.77% |
14.09% |
|
| ICICI Prudential |
25.1% |
13.69% |
|
| LIC |
- |
- |
|
| PNB Metlife |
25.78% |
17.2% |
|
Fund rating powered by
Last updated: Apr 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% |
|
What is SIP?
SIP is an investment method through which you invest in mutual funds and market-linked insurance plans. It allows you to invest a fixed amount regularly, like monthly or quarterly. With SIP, you do not need to time the market. Instead, your investments grow steadily over time through compounding and cost averaging.
Since the best SIP plans are flexible, you can increase the amount or discontinue investing in the fund whenever you wish.
SIP Calculator
Monthly Investment
₹22.4 L
Top Funds with High Returns (Past 7 Years)
18.22%
High Growth Fund
12.57%
Growth Super Fund
9.74%
Growth Fund
7.74%
Conservative Fund
17.6%
Top 200 Fund
14.46%
Large Cap Equity Fund
14.92%
Whole Life Aggressive Growth Fund
8%
Whole Life Income Fund
14.18%
Accelerator Mid-Cap Fund II
13.06%
Pure Stock Fund
9.43%
Asset Allocation Fund II
7.17%
Bond Fund
14.53%
Opportunities Fund
13.95%
Diversified Equity Fund
11.53%
Individual Prime Equity Pension Fund
9.81%
Balanced Fund
7.62%
Individual Preserver Pension Fund
9.95%
Equity II Fund
8.75%
Balanced Plus Fund
7.82%
Debt Fund
12.97%
Accelerator Fund
13.01%
Pension Enhanced Equity
9.32%
Stable Fund
7.37%
Debt Fund
13.77%
Grow Money Plus Fund
14.32%
Growth Opportunities Plus Fund
9.93%
Save N Grow Money Fund
7.46%
Steady Money Fund
15.13%
Multiplier
11.75%
Super 20
9.86%
Creator
7.7%
Income Advantage
10.46%
Equity Large Cap Fund
11.3%
Equity Top 250 Fund
8.86%
Managed Fund
7.3%
Bond Fund
12.88%
Future Apex Fund
8.93%
Future Balance Fund
6.8%
Future Income Fund
12.08%
Opportunities Fund
10.95%
Bluechip Fund
11.02%
Pension Bluechip Fund
9.39%
Multi Cap Balanced Fund
7.32%
Income Fund
13.99%
Frontline Equity Fund
12.83%
Classic Opportunities Fund
10.67%
Balanced Fund
11.32%
Pension Classic Opportunities Fund
7.55%
Dynamic Gilt Fund
14.89%
Virtue II
12.06%
Flexi Cap
9.76%
Balancer II
7.02%
Preserver II
10.59%
Pension Dynamic Equity Fund
6.94%
Debt Fund
11.53%
Equity Fund
11.18%
Growth Fund
7.28%
Bond Fund
10.05%
Blue-Chip Equity Fund
9.28%
Growth Plus Fund
6.59%
Income Fund
Why Should You Invest in SIP?
-
Example of Hemant, a Teacher
Let us understand the value of a SIP plan through Hemant’s story.
Hemant has three big financial goals:
-
Buy a car – ₹12 lakh in 5 years
-
Buy a house – ₹50 lakh in 10 years
-
Save for his daughter’s marriage – ₹50 lakh in 15 years
Let us explore using the SIP Calculator on how SIPs can help him achieve these goals in a simple, structured, and effective way.
-
Hemant’s Plan
Goal 1: Buy a Car (₹12 Lakh in 5 Years)
SIP calculator estimates that to achieve ₹12 lakh in 5 years at an assumed SIP interest rate of 12% p.a., Hemant needs to invest: ₹14,800 per month.
Goal 2: Buy a House (₹50 Lakh in 10 Years)
For ₹50 lakh in 10 years, Hemant must start early to reduce monthly pressure and invest per month: ₹22,300 per month.
Goal 3: Daughter’s Marriage (₹50 Lakh in 15 Years)
To save ₹50 lakh in 15 years, Hemant should invest: ₹10,500 per month.
What If Hemant Delays?
Delaying by 5 years means Hemant needs to invest more each month.
| Years Delayed |
Car Goal |
House Goal |
Marriage Goal |
| No Delay |
₹14,800/ month |
₹22,300/ month |
₹10,500/ month |
| 3 years |
₹27,900/ month |
₹38,800/ month |
₹16,200/ month |
-
How SIP Made it Easy:
SIPs are a smart way for Hemat to invest regularly and grow his wealth over time.
-
Small Monthly Investments: SIPs allow Hemant to start with manageable amounts and gradually build wealth.
-
Consistent Growth: Combines disciplined investing with the power of equity.
-
Mitigates Market Volatility: Spreads investments across time, reducing risk.
-
Beats Inflation: Higher potential returns compared to bonds.
-
Tax Benefits: Some SIPs (like ULIP, ELSS, and NPS funds) offer tax-saving benefits under Section 80C.
-
How SIP Works for Hemant:
| Goal |
Savings Required |
How SIP Helps |
| Buy a car |
Medium-term goal |
Regular investments grow steadily. |
| Buy a home |
Long-term goal |
Compounding builds a larger corpus. |
| Daughter’s wedding |
Long-term goal |
Protects against inflation with tax benefits. |
By understanding what is SIP investment and leveraging the SIP full form, Hemant simplifies his financial journey while achieving consistent growth and security for his investments.
How to Invest in SIP Investment?
You can invest in SIPs for ULIP plans and mutual funds through online, mobile, or offline methods.
-
Online Steps
-
Visit the official website of the chosen fund house or aggregator platform.
-
Register or log in to your account.
-
Select the mutual fund or ULIP plan you wish to invest in.
-
Choose the SIP option and specify details like amount, frequency, and tenure.
-
Complete the KYC process (if not already done).
-
Make the payment via net banking, UPI, or debit card.
-
Mobile App Steps
-
Download the fund house or investment app.
-
Log in or create an account.
-
Search for the desired ULIP or mutual fund.
-
Select the SIP option and set investment details.
-
Verify your KYC details.
-
Confirm the setup using in-app payment options.
-
Offline Steps
-
Visit the branch office of the fund house or consult a financial advisor.
-
Fill out the SIP registration form with plan and payment details.
-
Submit KYC documents like PAN, Aadhaar, and address proof.
-
Provide post-dated cheques or opt for auto-debit by submitting a signed mandate form.
-
Collect an acknowledgement receipt for your records.
As we have got an idea about 'what is SIP' and why you should invest in SIP, let us learn the working of SIP investment.
How Does SIP Work?
The SIP full form is Systematic Investment Plan, and you can understand its working by following through these points:
-
Fixed Contribution:
You decide an amount (e.g., ₹1,000/month). This fixed sum is deducted from your bank account and invested in a mutual fund scheme.
-
Units Allotment:
The money is used to buy units of a mutual fund scheme at the prevailing Net Asset Value (NAV) which changes as per market conditions. When NAV is low, you get more units; when high, you get fewer.
| Month |
Amount Invested (₹) |
NAV (₹) of the Mutual Fund Scheme |
Units Allotted (Amount Invested ÷ NAV) |
| January |
₹1,000 |
₹50 |
20.00 |
| February |
₹1,000 |
₹40 |
25.00 |
| March |
₹1,000 |
₹60 |
16.67 |
-
Power of Compounding:
Compounding provides you returns on both your principal and earned interest.
Suppose you invest ₹5,000 monthly through a SIP in a mutual fund offering an average return of 12% per annum (CAGR). Your investment grows over time due to compounding in the following way:
| Year |
Total SIP Investment (₹) |
Interest Earned (₹) |
Total Value (₹) |
| 1 |
60,000 |
3,916 |
63,916 |
| 5 |
3,00,000 |
1,16,508 |
4,16,508 |
| 10 |
6,00,000 |
4,11,797 |
10,11,797 |
| 15 |
9,00,000 |
10,35,582 |
19,35,582 |
-
Rupee Cost Averaging
| Month |
SIP Amount (₹) |
NAV (₹) |
Units Bought |
| Jan |
5,000 |
50 |
100 |
| Feb |
5,000 |
25 |
200 |
| Mar |
5,000 |
40 |
125 |
| Total |
15,000 |
Avg. NAV = 38.33 |
425 Units |
People Also Read: SWP Calculator
Benefits of a Systematic Investment Plan (SIP)
The key benefits of investing in a SIP investment plan are as follows:
-
Flexible Investments: You can start with a small amount and increase it as your income grows.
-
No Exit Penalty: You can stop or withdraw your investment anytime without any charges.
-
Saves Time: Automate payments and let your money grow while you focus on other tasks.
-
Stress-Free Investing: Rupee cost averaging helps your investments grow steadily despite market ups and downs.
-
No Market Knowledge Required: Fund managers handle everything, so you don’t need expertise in the market.
-
Encourages Financial Discipline: Regular SIPs help you save consistently without affecting your lifestyle.
-
Flexible Contributions: You can adjust your investment amount anytime to suit your goals.
-
Easy to Manage: Set up SIPs online once and let them grow automatically.
-
Reduces Risk: SIPs spread investments over time, minimizing risks from market fluctuations.
Types of SIP Investment Plans
Following are some of the types of SIP plans in India:
-
SIP with Insurance: Invest regularly while getting life insurance coverage for added security.
-
Fixed SIP: Invest a fixed amount at regular intervals to save consistently.
-
Flexible SIP: Adjust your investment amount anytime based on your financial needs.
-
Perpetual SIP: Keep investing indefinitely until you choose to stop.
-
Trigger SIP: Set conditions to invest more when specific market events occur.
-
Top-up SIP / Step-up SIP: Increase your monthly investment at regular intervals, like yearly with step-up sip investment.
-
Multiple SIPs: Invest in several funds simultaneously for better diversification.
Things to Keep in Mind for Maximum SIP Returns
-
Start early, and earn more significant returns.
-
Stay longer, and enjoy the compounding effect.
-
Be patient, the money is sure to grow in the long run.
-
Be consistent, and never skip your monthly payment.
In Conclusion
In this article, we have covered topics like what is SIP investment, why should I invest in SIP, SIP meaning, and how to invest in SIP. SIPs help you build wealth over time through power of compounding and reduce risks with rupee cost averaging. It is a great tool for achieving long-term financial goals with ease.
Frequently Asked Questions
-
What is SIP Full Form?
The SIP- full form is a Systematic Investment Plan. It is a popular investment strategy where you invest a fixed amount of money at regular intervals, typically monthly, into a market-linked investment like mutual funds and Unit Linked Insurance Plans (ULIPs).
-
What is the meaning of SIP?
SIP means investing systematically over time to grow wealth through mutual funds or ULIPs.
-
Can I withdraw SIP anytime?
Yes, you can withdraw your SIP investments anytime from ULIP plans after a fixed lock-in period and from Equity Linked Savings Scheme (<ahref="https://www.policybazaar.com/income-tax/equity-linked-savings-scheme/">ELSS) after a 3-year period.
-
Is SIP Tax-Free?
The SIP in Unit-Linked Insurance Plans (ULIP) offer tax benefits under Section 80C and
Section 10(10D) of the Income Tax Act, and the Equity Linked Savings Scheme offers tax savings under Section 80C. SIPs in other mutual fund schemes are not entirely tax-free, and the tax liability depends on the fund type and holding period.
-
What are the disadvantages of SIP?
The key disadvantages of a SIP investment plan are as follows:
-
Market Fluctuations: SIPs face market ups and downs, meaning temporary losses during downturns.
-
Limited Control: No timing-specific investments, you stick to a fixed schedule regardless of market conditions.
-
Slower Growth: Averaging out cost per unit might be higher than a lump sum investment in a steadily rising market.
-
Potential Lock-ins: Some tax-saving SIPs have lock-in periods, restricting access to your money.
-
What is the minimum investment amount for SIP?
The minimum investment for SIP is ₹100. The scheme aims to achieve long-term capital growth for its investors.
-
How frequently can one invest in a SIP?
The frequency of investment depends on the mutual fund scheme that you choose. Generally, mutual fund houses offer SIPs with a monthly, quarterly, or even weekly investment frequency.
-
Can the investment amount be changed during the SIP tenure?
Updating your SIP amount is not possible. However, you can initiate a new SIP anytime to meet your financial goals.
-
Can one withdraw money from SIPs before the completion of the tenure?
Yes, you can withdraw money from SIPs before the completion of the tenure. However, the process and the implications may vary depending on the mutual fund scheme that you have invested in.
-
Are there any tax benefits of investing through SIP?
SIP helps you save on taxes while earning substantial returns on your investments. For instance, if you invest in Equity Linked Saving Schemes (ELSS) through SIPs, you can avail a deduction of up to Rs 1.5 lakh from your taxable income under Section 80C.
