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Saturday, March 2, 2024

Best SIP Plans – Top SIP Mutual Funds To Invest in 2023


A systematic investment plan (SIP) is a process of investing in mutual funds. It is a substitute for the traditional lump-sum method of investing. The investors can invest a pre-determined amount in the mutual fund scheme through the process of the SIP Plan.

Best SIP Plans are a smart, hassle-free method of investing a fixed sum in a mutual fund scheme. Best SIP Plan for 1 year permits one to purchase units on a particular date every month in order to implement a saving plan. One can invest a particular prearranged amount at regular intervals that are chosen beforehand (quarterly/monthly/weekly). One of the biggest advantages of this best sip plan is that it inculcates the habit of saving in the user so that they can start to build a respectable fund for the future.

The saying ‘the early bird catches the worm’ holds for a sip best plans, as you can benefit greatly from starting early. An important aspect of the best sip plan for 1 year is the fact that maintaining it is hassle-free; your money will be auto-debited from your bank account each month and will also be invested into a mutual fund scheme of your choice. Moreover, you can take advantage of two powerful investment strategies such as the power of Compounding and Rupee Cost Averaging.

Best SIP Plans in India to Invest : 

The table below shows the best equity funds:

Mutual fund    5 years 3 yearsMin Investment
ICICI Prudential Technology Fund –Direct Plan-Growth 33.83% 38%500
ICICI Prudential Technology Fund    32.72%36.67%5000                        
Aditya Birla Sun Life Digital India Fund-Growth-Direct Plan32.62%   36.26%1000
Quant Small-Cap Fund-Direct Plan-Growth   22.19%35.9%—  
TATA Digital India Fund Direct Plan-Growth 33.99%35.7%5000          
Aditya Birla Sun Life Digital India Fund Growth 31.36%34.88%—                  
SBI Technology Opportunities Fund –Direct Plan-Growth   28.66%          33.77%5000
TATA Digital India Fund Regular Growth      31.73%33.46%
SBI Technology Opportunities  Fund     27.39%32.41%5000                      
PGIM India Midcap Opportunities      Fund-Direct Plan-Growth  
22.21%                                  32.13%                      5000           

The table below shows the best debt funds in India: 

Mutual Funds5 Years Return3 Years ReturnMin Investment
IDFC Government Securities Fund-Constant-Direct                                   10.12%                            12.89%            5000
NIPPON INDIA NIVESH LAKSHYA-Direct Plan-Growth    10.5%12.74%5000
IDFC Government Securities Fund-Constant Maturity Regular-Growth    10%12.74%—-
ICICI Prudential Multicap Fund –Dividend      12.74%12.67%5000
ICICI Prudential Constant Maturity Gilt Fund –Direct Plan-Growth     9.27%12.52%5000
Nippon India Nivesh Lakshya Fund –Regular Plan-Growth  12.39%—-NA
ICICI Prudential Constant Maturity Gilt Fund9.07%12.31%5000
IDFC Government Securities Fund-Investment Plan-Growth –Direct Plan 9.25%12.27%5000
Edelweiss Government Securities Fund –Direct Plan-Growth      8.94%11.88%5000
DSP Government Securities Fund –Direct Plan-Growth     8.84%11.81%500

The table below shows the best hybrid funds in India:

Mutual fund 5Yr.Returns  3Yr.ReturnsMin investmentRating
Quant Multi-Asset Fund –Direct Plan-Growth17.65%28.52% 5000***
Quant Multi-Asset Fund Growth17.37%28.01%NA
Quant Absolute Fund-Direct Plan-Growth19.46%27.2%5000 *****
ICICI Prudential Pharma Healthcare and Diagnostics(P.H.D)Fund Direct Plan-Growth26.89% — NA
Quant Absolute Fund Growth18.76%26.17%NA
HDFC Retirement Saving Fund-Equity Plan-Direct Plan-Growth18.77% 21.13%5000NA
Kotak Asset Allocator Fund –Direct Plan-Growth15.8%20.81%5000***
BNP Paribas Substantial Equity Hybrid Fund Direct Plan-Growth— 20.11% 5000*****
Kotak Asset Allocator Funds 14.96%20.06%5000 ***
ICICI Prudential Thematic Advantage Fund (FOF)-Direct Plan-Growth17.35%20.03%5000NA

Advantages of Best SIP Mutual Funds

Investing in mutual funds via SIP plans comes with lots of benefits. The following are some of the significant advantages of investing in mutual funds through the best sip plans:

  1.  Rupee cost averaging

Investing in mutual funds provides you with the benefit of rupee cost averaging. It means you buy fewer units when the markets are booming while you buy more units when the markets are on the bearish trend. Over time, the cost of purchase of your fund units averages out and turns out to be on the lower side.

2. You can invest a small sum

As mentioned earlier, investing via sip policies has alleviated the need to have a lump sum at your disposal to get started with your investment journey. The standard minimum investment amount is Rs 500. Some funds allow you to invest even Rs 100 a month. Therefore, an investable amount is not a barrier to get started with your mutual fund investments.

3. Flexibility

Best SIP Plans provide you with much-needed flexibility. You can start or stop the best sip plans at any time even the fund house also know that if you are running on a tight budget, then you may also opt to pause your sip plans for some time and all these come at no cost.

4. You can run multiple SIPs at a time

You can initiate and run the best SIP Plans into multiple mutual fund plans in parallel. Therefore, you can benefit from various mutual fund schemes at a time. However, you have to be cautious of the funds you have chosen to invest in.

Who Should Invest in Best SIP Mutual Funds 

Investing via best SIP plans for 1 year in mutual funds is advisable for all individuals. Mainly, best sip plans are advisable if you are a first-time investor by investing in mutual funds.

Investing via sip best plans alleviated the need to arrange a lump sum. Therefore, you can get started with your investing journey with a small amount. Many mutual fund plans allow you to invest a sum as low as Rs. 100 a month through a SIP plan and this option is not available with other investment options.

Is Investing through SIPs Better Then Lump Sum 

Investing via lump sum requires you to arrange a large sum of money, say Rs. 50,000. Whereas, Investing a lump sum in a mutual fund scheme is similar to investing in a bank fixed deposit. On the other hand, investing via best SIP Plans does not need you to have a substantial amount to get started. As mentioned earlier, you can start your investment journey with a sum as low as Rs. 100 a month.

If you are to get the most out of your lump-sum investment, then you should necessarily time the markets. Lump-sum investments are advisable only when the markets have hit rock bottom, and they are sure to go up in the coming days. Investing in mutual funds via a SIP does not require you to time the markets as you will get the benefit of rupee cost averaging over time. 

Taxability of best SIP Mutual Fund in India: 

Regardless of the mode of investment (SIP or lump sum), the same rules of taxation also apply in mutual funds. Dividends offered by mutual funds are added to your overall income and taxed as per the income tax slab you fall under.

  1. Taxation of equity funds 

Equity fund units redeemed within a holding period of one year will result in short-term capital gains. These gains are taxable at a flat rate of 15%. You make long–term capital gains if you redeem your fund units after a holding period of one year. Long- term capital gains of up to Rs. 1 lacs a year are made tax- exempt. Any long-term gains over and above this limit are taxed at 10%, with no benefit of indexation. Units purchased through best sip plans are redeemed on a first-in-first-out basis, and the rules of taxation mentioned above will also apply.

 If you invest in an equity fund for two years and decide to redeem all your investments at once at the end of two years, then the gains from the units that have been held for more than one year are taxable as long-term capital gains while the rest is taxable as short-term capital gains.

  1. Taxation of debt funds

Debt fund units redeemed within a holding period of three years result in short-term capital gains. These gains are added to your income and taxed as per the income tax slab you fall under. Long-term capital gains are realized when you redeem your debt fund unit after a holding period of three years. These gains are taxed at a rate of 20, with the benefit of indexation.

If you invest in a debt fund for four years and decide to redeem all your investing at once at the end of four years, then the gains from the units that have been held for more than three years are taxable as long-term capital gains while the rest is taxable as short-term capital gains.

  1. Taxation of hybrid funds

If the equity exposure exceeds 65%, then the rules of equity funds taxation apply. If not, then the fund is taxed like a debt fund.

How can you invest in SIP Plans?

You can invest in different types of SIP policies. Some sip plans are best performing sip plans for 1 year while some can be invested for the long run. If the investor is looking for the best sip plan for 1 year then he/she does not consider liquid funds as they have 91 days maturity period. On the other side, low duration debt-funds are also the best sip plan 2021 in which the investor can invest for 6 to 12 months. Investing in ultra-short duration debt funds can be also the best sip plan for 1 year. The maturity period of these sip plans is between 3 to 6 months.

There is a list of some best-performing sip plans for 1 year.

Investment3 Years Return1 Year Return
Franklin India Liquid Fund2%

Nippon India Liquid Fund1.3%6.3%
Invesco India Ultra Short Term Fund1%6.7%
IDBI Liquid Fund1.3%6.2%
DSP BlackRock Money Manager1%6.5%
BOI AXA Ultra Short Duration Fund1%6.7%
Kotak Savings Fund1.1%6.9%
India Bulls Ultra Short Term Fund1.2%6.8%
ICICI Prudential Ultra Short Term Fund1.2%7.7%
Aditya Birla Sun Life Savings Fund0.9%7.3%

Frequently Asked Questions (FAQs)

Q1.Is it worth going for sip plans in a fund where the NAV price is very high?

Ans. You should not consider NAV as a deciding factor while investing in mutual funds via sip best plans. It is a myth that it’s good to invest in a mutual fund with low NAV mutual funds because you will get more units and that means more returns. As high or low has nothing to do with the future performance of the fund –NAV keeps changing due to the performance of the fund and that depends on markets & fund manager performance.

Q2. I want to invest in Reliance mutual fund, but as I am seeing the NAV, there is a huge gap in growth and Dividend NAV. Which is better to invest in?

Ans. Most mutual fund schemes come in three options– divided, dividend reinvestment, and growth. Undergrowth option, you get the units at the time of buying and you have the same number of units till the end. The NAV keeps changing according to performance. The fact that under the dividend option the fund keeps on declaring regular dividends so NAV reduces with such dividends.

Q3. What are the tax benefits I can get while investing through mutual funds? Are there any special funds where I can invest to avail myself of tax benefits?

Ans. Tax benefits in mutual funds keep changing from time to time. according to current laws, a few of the tax benefits are no long term gain tax on the sale of equity mutual fund (the long term here means 1 year plus), tax-free dividend, no dividend distribution tax in case of equity mutual fund, the benefit of indexation in case of debt mutual fund & lower long term gain tax in comparison to any other interest-bearing product. You can also invest in Equity linked tax saving schemes of mutual funds to take benefit under section 80 C. ELSS schemes have a locking period of 3 years & as the name suggests they invest in equity shares.

Q4. I was running a SIP plan of reliance vision for Rs 1500/- per month. It ended the last September…I invested Rs 36000/-in 2 years… the present value is Rs 49,000/-. It touched Rs.54,000/- a few months back also but I didn’t withdraw the money. But now as the markets are going down, I think I have taken a wrong move by not taking the money out.

Ans. Equity gives you two types of return, one is speculative and another is fundamental growth. 95% of the investors in shares or mutual funds are here for speculative gain that is gain from the short-term price movement. They start timing the market rather than giving time in the market. This approach for short-term gains is the real cause of loss. Investment, in the long run, is not only rewarding but also beats inflation by a good margin and creates wealth. If you keep such a close track on your investment it is going to be very tough for you to achieve your goals through equity investment.

Q5. Does SIP Investment offer tax benefits?

Ans. Not all SIP plans offer tax benefits. The investments made through SIP in an equity-linked savings scheme are applicable for tax exemption under section 80C of the income tax Act.

Q6. What are the maximum and minimum amounts that can be invested in the best SIP plans?

Ans. Investors can start investing in the best sip plans with a minimum amount of Rs.500. However, there is no upper limit on the maximum investment in sip best plans.

Q7. How can I start Investment in sip plans?

Answer: Investors can choose the offline or the online method to start investing in sip plans. For online method:

  1. Visit the official website of the asset management company (AMC).
  2. Fill in all the details for online SIP.
  3. Along with the details of KYC, the investors will be required to submit the scanned copy of address proof, cheque, account number, and ID proof.

For offline methods.

  1. Visit the branch office of the asset management company (AMC) or take service from financial service outsourcing company.
  2. Fill the auto-debit form and application form thoroughly.
  3. Submit all the important documents such as address proof, ID proof along with the properly signed cheque to the address of the mutual fund.   

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