Why Should We Invest in SIP?

Have you ever thought why SIP is one of the most suggested methods of investing in mutual fund^^ schemes? Well, the main reason that SIP is recommended is that it helps in maximizing profit with the benefit of compounding. Today we are discussing in detail why should you invest in some of the best SIP plans?

Read more

SIP Plan 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 80C^
Zero LTCG Tax
Zero LTCG Tax
Disciplined & worry-free investing
Disciplined & worry-free investing

Payment Mode
Invest
₹ 10,000
Invest for
AUM (Cr)

₹10,554

NAV

114.14

Estimated Value

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

+ 28.6 21.1 17.8 %

Instant tax receipt
AUM (Cr)

₹2,693

NAV

71.67

Estimated Value

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

+ 20.95 15.68 15.53 %

Instant tax receipt
AUM (Cr)

₹3,282

NAV

70.19

Estimated Value

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

+ 20.99 16.04 15.13 %

Instant tax receipt
AUM (Cr)

₹5,681

NAV

80.91

Estimated Value

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

+ 20.38 12.4 14.97 %

Instant tax receipt
AUM (Cr)

₹36,935

NAV

76.38

Estimated Value

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

+ 21.72 14.49 14.67 %

Instant tax receipt
AUM (Cr)

₹433

NAV

67.94

Estimated Value

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

+ 17.79 13.24 14.52 %

Instant tax receipt
AUM (Cr)

₹4,390

NAV

68.06

Estimated Value

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

+ 20.68 14.47 14.42 %

Instant tax receipt
AUM (Cr)

₹3,552

NAV

41.11

Estimated Value

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

+ 17.79 12.99 14.23 %

Instant tax receipt
AUM (Cr)

₹7,241

NAV

154.47

Estimated Value

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

+ 17.82 13.2 14.01 %

Instant tax receipt
AUM (Cr)

₹235

NAV

49.42

Estimated Value

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

+ 20.36 14.6 13.98 %

Instant tax receipt
AUM (Cr)

₹2,693

NAV

71.67

Estimated Value

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

+ 20.95 15.68 15.53 %

AUM (Cr)

₹3,282

NAV

70.19

Estimated Value

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

+ 20.99 16.04 15.13 %

AUM (Cr)

₹433

NAV

67.94

Estimated Value

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

+ 17.79 13.24 14.52 %

AUM (Cr)

₹4,390

NAV

68.06

Estimated Value

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

+ 20.68 14.47 14.42 %

AUM (Cr)

₹3,552

NAV

41.11

Estimated Value

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

+ 17.79 12.99 14.23 %

AUM (Cr)

₹7,241

NAV

154.47

Estimated Value

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

+ 17.82 13.2 14.01 %

AUM (Cr)

₹235

NAV

49.42

Estimated Value

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

+ 20.36 14.6 13.98 %

AUM (Cr)

₹104

NAV

54.94

Estimated Value

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

+ 19.95 14.01 13.64 %

AUM (Cr)

₹13,106

NAV

81.15

Estimated Value

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

+ 17.04 12.44 13.2 %

AUM (Cr)

₹2,130

NAV

65.64

Estimated Value

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

+ 16.11 12.07 12.87 %

AUM (Cr)

₹10,554

NAV

114.14

Estimated Value

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

+ 28.6 21.1 17.8 %

AUM (Cr)

₹5,681

NAV

80.91

Estimated Value

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

+ 20.38 12.4 14.97 %

AUM (Cr)

₹36,935

NAV

76.38

Estimated Value

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

+ 21.72 14.49 14.67 %

AUM (Cr)

₹2,211

NAV

62.53

Estimated Value

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

+ 26.65 20.83 20.1 %

AUM (Cr)

₹1,021

NAV

72.98

Estimated Value

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

+ 19.89 14.16 14.9 %

AUM (Cr)

₹13,589

NAV

68.37

Estimated Value

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

+ 18.77 13.18 13.45 %

AUM (Cr)

₹3,406

NAV

59.13

Estimated Value

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

+ 20.06 13 12.83 %

AUM (Cr)

₹1,125

NAV

52.57

Estimated Value

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

+ 18.82 12.32 12.59 %

AUM (Cr)

₹528

NAV

57.06

Estimated Value

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

+ 17.17 11.46 11.73 %

AUM (Cr)

₹215

NAV

94.32

Estimated Value

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

+ 7.86 8.31 8.51 %

AUM (Cr)

₹831

NAV

40.54

Estimated Value

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

+ 5.98 7.89 7.69 %

AUM (Cr)

₹488

NAV

38.24

Estimated Value

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

+ 5.67 7.93 7.51 %

AUM (Cr)

₹123

NAV

29.45

Estimated Value

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

+ 6.02 7.04 7.19 %

AUM (Cr)

₹71

NAV

40.75

Estimated Value

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

+ 5.44 7.32 7.18 %

AUM (Cr)

₹198

NAV

46.83

Estimated Value

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

+ 4.89 7.35 7.11 %

AUM (Cr)

₹19,241

NAV

49.64

Estimated Value

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

+ 5.46 7.26 7.04 %

AUM (Cr)

₹7,540

NAV

32.11

Estimated Value

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

+ 5.01 7.03 7.01 %

AUM (Cr)

₹93

NAV

38.53

Estimated Value

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

+ 5.3 7.33 6.99 %

AUM (Cr)

₹1,064

NAV

46.35

Estimated Value

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

+ 5.86 7.19 6.95 %

AUM (Cr)

₹892

NAV

97.92

Estimated Value

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

+ 19.94 15.74 15.56 %

AUM (Cr)

₹363

NAV

47.61

Estimated Value

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

+ 13.31 10.85 10.77 %

AUM (Cr)

₹66

NAV

59.84

Estimated Value

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

+ 10.79 9.52 10.3 %

AUM (Cr)

₹5,648

NAV

39.58

Estimated Value

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

+ 12.41 9.72 10.28 %

AUM (Cr)

₹492

NAV

102.87

Estimated Value

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

+ 11.29 9.87 10.27 %

AUM (Cr)

₹22,609

NAV

72.27

Estimated Value

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

+ 11.05 9.65 10.1 %

AUM (Cr)

₹7,725

NAV

109.42

Estimated Value

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

+ 11.81 9.85 9.99 %

AUM (Cr)

₹286

NAV

31.13

Estimated Value

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

+ 12.23 9.21 9.95 %

AUM (Cr)

₹839

NAV

38.8

Estimated Value

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

+ 12.24 9.8 9.91 %

AUM (Cr)

₹1,978

NAV

43.18

Estimated Value

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

+ 12.81 9.5 9.77 %

AUM (Cr)

₹1,321

NAV

81.46

Estimated Value

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

+ 18.97 13.18 14.01 %

AUM (Cr)

₹7,241

NAV

155.14

Estimated Value

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

+ 17.64 13.26 13.96 %

AUM (Cr)

₹2,935

NAV

69.1

Estimated Value

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

+ 16.82 12.75 13.39 %

View More

Whenever you think of a long-term investment plan and ask some experts about the same, he/she will suggest you to start investing in a Systematic Investment Plan (SIP). Here, we are discussing the advantages of investing in best SIP plans:

  • Advantage Because of the Power of Compounding: The meaning of compounding is to earn interest by investing again in the earned interest. In this way, the compounding can turn a small amount of money to a large corpus, if invested regularly. The experts of investment suggest starting to invest with a small amount at an early age than waiting for a big amount to start the investment. For example, if you start investing Rs.1, 000 monthly in an equity scheme for meeting your long term goal of 10 years, then with a 12% return you will get approximately Rs.2, 32, 339 after 10 years. On the other hand, if you start investing Rs.1, 500 for a goal of five years, you will get approximately Rs.1, 23, 729 after five years. You can also use an online SIP calculator to know your SIP returns as per your investment tenure.

  • You Include Financial Discipline in Your Financial Routine: Since most of us start investing in SIP to make a profit, but the one good habit that comes with it is financial discipline. Many of us start and then stop investing, the start of investment shows their optimistic approach whereas stopping the investment shows their pessimist approach. However, the SIP puts these doubts in an end as you invest regularly in it. In SIP you have to pay a fixed amount of money regularly irrespective of the conditions of the market. Since the money is debited directly from your account, thus there are very fewer chances for you to miss the investment. You can as well set the SIP payment date soon after your date of salary to avoid money spending before the date of SIP. The main reason for the same is – only a small investment can create large corpus in a long period. The simple example to understand this is – the retirement corpus that you cannot create overnight. Instead, you have to invest regularly to make a corpus of approximately Rs.1 Crore for your retirement.

    People Also Read: Systematic Withdrawal Plan (SWP)

    benefits-sip benefits-sip
  • To Average Your Purchase Cost: The stock market is very well known for its volatility and the investors try to avoid this problem by the market timing. This is, they purchase when the market is down and sell when the market is up. However, it is not easy for everyone to match the timings. This is because you can never know when the market can hit the bottom or goes high. Therefore, to average put your investment is to invest a small amount regularly for a long period. We are here giving a table that explains why should we invest in SIP? This table shows how SIP averages out the cost price. For this example, we are assuming that the NAV price is fluctuating between Rs.97 to Rs.105. Suppose the amount you invest in your SIP is Rs.2, 000 per month and the average cost price is most of the time low over a longer period.

Date of SIP NAV SIP Amount Number of Units (Amount of SIP/ NAV)
10-June-2016 100 Rs.2, 000 20
10-July-2016 105 Rs.2, 000 19.05
10-Aug-2016 103 Rs.2, 000 19.42
10-Sep-2016 100 Rs.2, 000 20.00
10-Oct-2016 98 Rs.2, 000 20.41
10-Nov-2016 97 Rs.2, 000 20.62
Total   Rs.12, 000 119.49
Average Cost Price of SIP Rs.100.43

 

  • Lower Investment Cost: It is always good to have expectations from your investment, especially when you are investing in equity schemes like SIP. The reason for the same is you get a robust strategy for making money. In SIP, you do not need to invest a large amount instead with a steady investment of a lower amount you can make money. In this investment, the fund manager keeps purchasing the units of the said schemes of mutual funds through your monthly SIP despite the stock market's state. In this way, with the lower investment, you can make a big corpus in some time.

  • You Can Easily Achieve Your Financial Objectives: Not having any plan makes it difficult to achieve anything that you want. You may have a plan of purchasing a house, but do not know how to achieve it. Since purchasing a house is a big project, so starting early is suggested. If you start investing regularly even with a small amount for a long period in investments like SIP, you can easily achieve your goal. In this way, SIP works as a way to easily achieve your financial goals, but to be clear about your goals is all that is needed. This is because; with a goal in your mind you can decide how much you want to invest and for how long.

People Also Read: XIRR Meaning

Final Words: These are some of the reasons to show you why we should invest in SIP. However, SIP is one of the prudent ways to achieve your financial goals, but all you need to do is to stay committed to regular investment. However, return through funds is not guaranteed and always subject to the risks of the market still SIP is one of the safest ways of investment for salaried people.

  • Insurance Companies
  • Mutual Funds
Returns
Fund Name 5 Years 7 Years 10 Years
High Growth Fund Axis Max Life
Rating
28.6% 21.1%
17.8%
View Plan
India Consumption Fund Tata AIA Life
Rating
26.65% 20.83%
20.1%
View Plan
Accelerator Mid-Cap Fund II Bajaj Allianz
Rating
20.38% 12.4%
14.97%
View Plan
Opportunities Fund HDFC Life
Rating
21.72% 14.49%
14.67%
View Plan
Opportunities Fund ICICI Prudential Life
Rating
20.06% 13%
12.83%
View Plan
Multiplier Birla Sun Life
Rating
22.25% 14.42%
15.78%
View Plan
Virtue II PNB MetLife
Rating
20.99% 16.04%
15.13%
View Plan
Equity II Fund Canara HSBC Life
Rating
16.71% 9.95%
10.99%
View Plan
Balanced Fund LIC India
Rating
10.6% -
-
View Plan
Equity Fund SBI Life
Rating
16.87% 11.68%
12.1%
View Plan
Fund rating powered by
Last updated: Aug 2025
Compare more funds

  Returns
Fund Name 3 Years 5 Years 10 Years
Active Fund QUANT 23.92% 31.48%
21.87%
Flexi Cap Fund PARAG PARIKH 20.69% 26.41%
19.28%
Large and Mid-Cap Fund EDELWEISS 22.34% 24.29%
17.94%
Equity Opportunities Fund KOTAK 24.64% 25.01%
19.45%
Large and Midcap Fund MIRAE ASSET 19.74% 24.32%
22.50%
Flexi Cap Fund PGIM INDIA 14.75% 23.39%
-
Flexi Cap Fund DSP 18.41% 22.33%
16.91%
Emerging Equities Fund CANARA ROBECO 20.05% 21.80%
15.92%
Focused fund SUNDARAM 18.27% 18.22%
16.55%

Last updated: August 2025

Compare more funds

Buying the Dip Results in Higher ReturnsBuying the Dip Results in Higher Returns

˜Top plans are based on annualized premium, for bookings made through https://www.policybazaar.com in FY 25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India 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).

SIP plans articles

Recent Articles
Popular Articles
SIP Plan for 5 Years

20 Aug 2025

Systematic Investment Plans (SIPs) are one of the most efficient
Read more
HDFC SIP प्लान्स

13 Aug 2025

HDFC SIP (सिस्टमैटिक
Read more
Perpetual SIP

01 Aug 2025

Wealth creation is a result of long-term investing. In a
Read more
Difference Between SIP and Mutual Fund

22 Jul 2025

For new investors, the terms SIP and mutual fund often create
Read more
Star Union Dai-ichi SIP Plan

15 Jul 2025

Star Union Dai-ichi Life Insurance Co. Ltd. (SUD Life) offers a
Read more
SIP Calculator
  • 10 Apr 2018
  • 1029145
An SIP is a disciplined way to invest in mutual funds. It involves contributing a fixed amount regularly
Read more
SIP Investment Plans - SIP Funds to Invest in India
  • 01 Feb 2017
  • 1110115
A Systematic Investment Plan (SIP) is a smart and convenient way to invest in mutual funds. It allows you to
Read more
Best SIP Plans
  • 14 Feb 2020
  • 282383
Best SIP Plans to Invest in India in 2025 Systematic Investment Plans (SIPs) have become a popular investment
Read more
SBI SWP
  • 07 Apr 2025
  • 7767
SBI SWP, or Systematic Withdrawal Plan, is a popular investment option offered by SBI Mutual Fund. An SBI SWP
Read more
SBI SIP Plans (Systematic Investment Plan)
  • 05 Oct 2018
  • 181525
SBI Systematic Investment Plan or SBI SIP Plan is a convenient and disciplined approach to investing in
Read more

Invest ₹10K/Month & Get ₹1 Crore# Tax-Free*
*under 10(10D)
Claude
top
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL