Best SIP Mutual Fund Plans

5paisa Research Team Date: 27 Mar, 2024 04:41 PM IST


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A systematic Investment Plan or SIP is the most convenient way to invest in the stock market. You do not need to worry about volatility or keep track of market trends, global affairs, macroeconomic conditions, or events. All you need is to allocate a portion of your monthly income to the SIP account and invest systematically.

SIPs suit both conservative as well as aggressive investors since it takes away the pain of stock hunting and portfolio management since the mutual fund manager does it for you. However, choosing the right fund is crucial for healthy capital growth. And, before choosing a mutual fund, you must analyze the purpose of investing.

Read on to know the best SIP plan to invest in terms of returns, management quality, and investment rationale to get the best returns in 2022.


Best SIP Mutual Fund Plans in India in 2022

According to the studies, the following are some of the best performing mutual funds to invest in through SIP in India.

Name of the fund

Category of the fund

Canara Rob Bluechip Equity Fund-Reg(G)

Large Cap Fund

Quant Absolute Fund

Aggressive Hybrid Fund

BOI AXA Mid and Small Cap Equity and Debt Fund

Aggressive Hybrid Fund

Canara Rob Emerg Equities Fund-Reg(G)

Large & Mid Cap

IIFL Focused Equity Fund-Reg(G)

Focused Fund

Nippon India Value Fund(G)

Value Fund

Parag Parikh Flexi Cap Fund-Reg(G)

Flexi Cap Fund

Quant Tax Plan


Mirae Asset Tax Saver Fund

Tax Saving

DSP Tax Saver Fund-Reg(G)

Tax Saving


Who Should Invest in Best SIP Mutual Funds?

The following three categories of investors are appropriate for SIP investments:

1. The Conservative Investor: Conservative investors who want to spread their risk exposure frequently opt for SIP. Since SIP invests in all market circumstances, there is little chance of suffering a financial loss.

2. The Novice Investor: SIP spreads out the whole yearly investment amount across a number of months, making it a recommended method for new investors to achieve a respectable sum without taking many risks.

3. The Expert Investor: An experienced investor without a SIP account is uncommon. Experienced investors use SIP for systematic investing because they understand the value of disciplined investing. When the market declines, they also add to their investment with a lump payment. They are also well aware of their purpose of SIP investments and the types of investments to pick


Factors to Consider Before Investing in SIP

1. Determine your Financial Goal

Before selecting a fund for your investment, consider your goals. Do you plan to put money aside for retirement, a vacation, or a down payment on a house? Based on what your goals are, you should estimate how much money you'll need to achieve them. Then you may decide how much to invest each month and what type of returns you should expect.

2. Compare Different Schemes

Once you've decided on the sort of fund for which you want to start a SIP, make a list of the major competitors. Make certain that they follow your list of requirements. Compare their previous performance, fund objectives, fund management backgrounds, expense ratios, and other critical aspects. 

3. Check the AUM of the Fund

AUM, or Assets Under Management, is the market value of the entire fund or the assets owned by the fund. It measures the performance of the fund. As AUM grows, so does the trading value. Simply put, this demonstrates how many people have already invested in the corpus and what kind of activities they will be dealing with.

4. Analyze the Performance of the Fund

The fund house you select should be reputable and well-known. In most cases, a reputed fund business is a favorable indicator for its performance and returns. Examine the schemes and avoid those with risks like volatility and low liquidity. Look for funds that have received outstanding ratings from CRISIL-rated funds. The funds ranked 1-3 are the best.

5. Asses the Expense Ratio

When selecting a plan, it is important to take into account the expense ratio of the fund as well as the entry and exit loads assessed at the time of redemption. Check the websites for the portfolio statement, fund information sheet, and performance monitoring. You should pay close attention to a mutual fund's expense ratio since operational and managerial costs can have a big impact on net profitability. The expense ratio is calculated by dividing the entire amount of fund fees by the total asset value of the fund.

Advantages of Best SIP Mutual Funds

Following are the advantages of investing in best SIP mutual funds in India:

●  Rupee-Cost Averaging: Because SIP stretches out your net yearly investment amount, you can achieve superior rupee-cost averaging. Simply said, when the NAV is low, you receive more units and when the NAV is high, you get less units.

●  Convenient Investing: Since SIP does not require a monthly money transfer, it is more convenient than other investing choices. You have the option of writing post-dated checks or giving your bank standing orders to have the SIP amount automatically taken from your account each month.

●  Easy on Pocket: You may open a SIP account with as little as INR 500 every month. Other than Post Office Recurring Deposit, there may be no investment product that permits such a little commitment. As a result, you may deposit a small sum and build up a sizable corpus.

●  Getting Rid of Investment Biases: Multiple investment biases are frequently observed to influence investment decisions. Timing bias and emotional bias are two examples of this. Market fluctuations have an influence on investing choices due to the psychosis of fear and greed. It is advised not to withdraw money from the market during times of market turbulence, and since SIP is successful at addressing this issue, investors are free to carry on with their investing activities.

●  Staggering Investments Over Time: Another big benefit of SIP is that it allows investors to make their investments at their leisure. If one chooses to invest in their financial future in a lump sum, the complete money must be paid up front. This, however, will not be attainable since the investors may not be able to acquire the necessary investment corpus for their financial goals through their anticipated regular savings. This may result in dissatisfaction and indifference


Taxability of Best SIP Mutual Fund

●  Taxation of equity funds: The redemption of equity fund units within a year of acquisition will result in short-term capital gains. These gains are taxed at a fixed rate of 15%. Long-term capital gains will be realized if you sell your fund units after a year of holding them. Long-term capital gains of up to Rs 1 lakh are free from taxation each year. Any long-term gains that exceed this limit are subject to a 10% tax with no indexation advantage. For units obtained through SIPs, first-in, first-out redemption is employed, and the aforementioned tax requirements apply.

●  Taxation of debt funds: Short-term capital gains are realized when debt fund units are redeemed within three years of acquisition. These gains are added to your income and taxed in accordance with your tax bracket. When you redeem your debt fund units after three years of ownership, you will receive long-term capital gains. These gains are taxed at a 20% rate with indexation.

Now that you know the top SIP plans you can invest in, it's time to start the SIP account. Visit 5paisa to invest seamlessly. 5paisa lets you invest without paying any commission so that you can earn higher profits. Click on this link to level up your SIP investment journey.

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