SIP Investment Plans: Best SIP Funds to Invest in India

We tend to overthink the investing process, which unintentionally makes it more challenging. For example, when should we start? What to invest? What should I invest in? Suppose the investment fails.

Even in times of market volatility, the best SIP plans provided by these fund management organizations have provided disciplined clients with exceptionally high returns.

Best SIP Plans for the Year 2022

Today, a variety of solutions for systematic investment are available. Let’s look at a few top-performing funds that may be good choices for SIP investments in 2022.
● Axis Blue Chip Fund
● Birla Sun Life Insurance Company Ltd
● PNB MetLife India Insurance Company Limited
● Mirae Asset Emerging Blue-chip Fund
● Kotak Standard Multicap Fund Regular Plan
● Bluechip Equity Fund
● HDFC Hybrid Equity Fund
● Future Opportunity Fund
● Bharti AXA

When to use a ULIP versus a mutual fund

One of the most often asked questions by investors is “ULIP vs. Mutual Fund.”

● For individuals looking to invest in the stock market, ULIPs are a less hazardous option. Both the risk and the returns are lower than equities mutual funds.

● Although the structure of ULIPs is opaque, they are sophisticated financial products that combine risk management and portfolio allocation. Mutual funds provide greater information about their fees and the investments made with your money.

● Low investment fees and expert investment management are two advantages of mutual funds. As a result, these schemes’ fees may be significantly greater than those of mutual funds.

● ULIPs have a built-in insurance plan. If the ULIP holder passes away within the period of the policy, it provides the family with the sum assured. Mutual funds, however, do not offer risk protection through insurance.

What Is SIP – Systematic Investment Plan?

A systematic investment plan (SIP) is a systematic strategy to make equal investments in mutual funds at regular intervals. This could be a weekly, biweekly, monthly, quarterly, or annual SIP. Month SIP is a well-liked option among these many others.

The systematic investing plan offers investors a way to access the stock market without having to worry about the timing of their investments. As they set aside a specific amount on a regular basis, it helps to discipline people and instil the saving habit.

How Does SIP work?

Through SIPs, you can invest in any kind of mutual fund, supporting your long-term wealth building. Making money is not the same as accumulating wealth in this sense. Only fixed deposit investments will yield returns. But if you want to accumulate wealth,you can invest in SIP mutual funds Additionally, at the interval you choose for investing, this amount is automatically deducted from your bank account.

Suppose you automate a SIP deduction every month on the 25th and make an investment of a certain amount on that day. Therefore, on the 25th of each month, this amount will be deducted automatically from your bank account and invested in the mutual fund of your choice.
One does not have to be an expert at market timing to invest in stocks. The costs for purchasing units vary. When prices are high, investors buy more units, whereas when prices are low, they buy fewer units.

Investors in even the best SIP plans can benefit from two strategies: rupee cost averaging and the power of compounding.

A. Dollar-Cost Average

Each time you invest through a SIP, your price is averaged out. As you can see, the markets move in cycles. The trend may occasionally swing between being bearish and bullish before returning to being bearish. The cycle continues in this way.

As a result, if you consistently invest a particular amount in a SIP, you will get more units in a down market for your investments. When the markets grow, there will be a significant reduction in the number of units allotted to your assets. In other words, you purchase more units while the market is declining and fewer when it is rising. In this way, your expense is averaged.

The stock markets in India are prone to abrupt shifts. Consequently, deciding when to invest and when not to might be difficult. Using rupee-cost averaging, investors can resolve this problem. When the price is low, you can earn more units, and when the price is high, you can earn fewer units.

The stock markets in India are prone to abrupt shifts. Consequently, deciding when to invest and when not to might be difficult. Using rupee-cost averaging, investors can resolve this problem. When the price is low, you can earn more units, and when the price is high, you can earn fewer units.

B. Power of Compounding

With the power of compounding, interest on investments is compounded over time and aids in building long-term wealth by being reinvested.

In this manner, your money can expand exponentially because further interest is created on the increasing capital (original principal + interest). It follows that the advantages of compounding are larger the longer your investing horizon.

You receive interest on any amount you invest in a SIP mutual fund. These interest rates build up over time and compound. With a longer tenure, the fund’s value would rise. Because of the power of compounding, you can increase your wealth if you invest for a longer length of time.

As a result, if you start investing early in life, you will be able to accumulate more wealth than someone who starts later.

Types of Systematic investment plan SIP

With SIPs, you can set a minimum investment amount to encourage disciplined investing by making regular instalment payments. If you’d like, you can adjust the amount by raising or lowering the SIP contribution. Based on this, SIPs can be classified into the following types:

1. Regular SIPs

Investors fix an instalment payment amount and maintain it in this type of SIP. They either enable electronic transfers of money from the bank to the SIP account or provide the bank recurring instructions. Because regular intervention is not necessary and an equivalent amount is spent during market spikes and dives, the process is hassle-free. The price of the acquired SIP units is averaged out as a result.

2. Permanent SIP

Given that it is connected to every SIP investor, perpetual SIP is one of the greatest possibilities in the range of systematic investments. The SIP mandate requires you to specify the start and end dates for the SIP when you initiate it. While most investors include the beginning date, few also include the ending date.

Every SIP that doesn’t have an expiration date specified in the mandate becomes a perpetual SIP that is assumed to last until 2099. Make sure to include the SIP end date as well if you only want to invest for a set period of time.

3. Trigger SIP

You can choose a trigger for your SIP investment with the Trigger SIP. For instance, you may specify that the money from your SIP should be taken out of your account and utilised to buy units of the chosen scheme.

You can choose from a variety of triggers, including dates and even index levels like the Nifty or Sensex. However, this choice is only advised for seasoned investors who have the skills and expertise to set such triggers correctly.

4. Flexible SIP

With this SIP type, you can alter your investment amount in accordance with your cash flow. In this way, if you run into financial difficulties for any reason, you can skip one or more instalments. When you earn a bonus or increased income, you can also contribute more to your SIP account.

Benefits of Investing in SIP

Flexible and cost-effective investment alternatives – You may always start small and raise the amount as your earnings improve over time.

The power of compounding: Regular investment is one of the best ways to accumulate wealth. A small amount that is regularly invested over time will eventually double. Compound interest’s advantage over one-time investments ensures excellent long-term profits.

reduces your stress – Unlike a mutual fund, you are not stressed out by the market’s highs and lows.

You have the right to halt at any time.
The majority of SIPs do not penalise or fine you if you decide to halt or terminate the plan at any time.By visiting your Demat account and choosing to leave the plan, you can complete the resignation procedure. Traditional investments like recurring deposits (RD) and fixed deposits do not offer this benefit (FD).

What is a SIP Mutual Fund?

SIP allows you to invest a defined amount of money over time at predetermined periods, unlike lump sum investments. Prospective investors should be aware that SIP is only a way to invest in mutual funds; it is not a specific kind of mutual fund. Therefore, a SIP mutual fund may be thought of as an MF programme that enables people to invest in it through SIPs. Additionally, the returns produced by such an investment plan are referred to as SIP returns.

A professionally managed fund that pools money from a lot of clients to invest in capital assets is what a SIP mutual fund is, to put it simply. These mutual funds use the money raised from various investors to buy stocks, shares, or bonds from different companies.

Benefits of SIP Investment in Mutual Funds

1. Advantages of compounding

One of the biggest advantages of SIP investments is this. The concept of compounding, which occurs when investment gains are reinvested to boost prospective returns, underpins a systematic investment plan. As a result, an investor’s investment will yield returns on both their initial investment and any interest they earn in the future.

2. Disciplined Investing

The systematic investment plan instalment amount is automatically taken from your account and invested in mutual funds when you invest via SIPs, so you don’t need to analyse the market or choose an appropriate time to invest.

3. Rupee Cost Averaging

A special feature of SIPs, rupee cost averaging allows investors to purchase more units when the market is down.Similar to this, one will purchase fewer units during a market upswing. Investors can manage market changes and make investments that are resistant to volatility as a result.

How does SIP Calculator Work?

The SIP Calculator is an online tool that allows you to estimate your SIP returns over time even before you begin investing. Compound interest is the basis for the computation of SIP returns. This tool will instantly compute the returns for you when you enter the amount you desire to invest and choose the investment tenure.


Beginning your investment career early in life will pay out handsomely in the long run. Holding investments for a long time is necessary to get the benefits of compounding.

CA Mukesh Gupta
CA Mukesh Gupta
Mukesh Gupta is the founder and director of Wealthcare. He is Fellow chartered accountant, Certified Financial Planner and Certified Public Financial advisor. He is in financial services industry since 1994. He conducts free money management sessions for corporates and associations on topics related to Personal finance. His previous engagement was with Birla Sunlife group. He regularly writes on topics related to Personal finance and occasionally appear on electronic media.

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