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A Systematic Investment Plan (SIP) is a popular mutual fund investment strategy that regularly helps you save small amounts. It is an alternative to the typical way of lump sum investing. Through SIP, investors can invest a predetermined amount of money at regular intervals in a mutual fund scheme.  The article covers the Best SIP for 1 year. 

Best SIP Plans for 1 Year

Fund Name1 Yr CAGRAUM in CroresExpense Ratio
ICICI Prudential Liquid Fund3.40%₹40,402.170.29
Aditya Birla Sun Life Savings Fund3.70%₹16,108.830.49
Aditya Birla Sun Life Money Manager Fund3.60%₹15,495.320.33
HDFC Overnight Fund3.30%₹18,675.840.2
HDFC Floating Rate Debt Wholesale Plan3.40%₹18,297.430.48

1. ICICI Prudential Liquid Fund for SIP

The ICICI Liquid Fund seeks to deliver adequate returns and a high level of liquidity by allocating its assets to fixed income debt securities. The fund is appropriate for investors who wish to invest their funds for a period of up to one year.

Since its inception in 2005, the fund has a significant history and track record. It is the second largest in the category in terms of size. The fund’s performance has consistently outperformed its category average. Additionally, the fund has maintained a higher average level of return predictability. At the same time, ensuring its market-determined risk is the lowest among its category peers.

Scripbox recommends investing in the fund and believes that the credit quality of the securities is considered to be superior to the category average. Also, the fund has generated inflation-beating returns in the long term. Moreover, the impact of interest rate fluctuations is very low.

Fund Details

  • Minimum SIP Amount: ₹1,000
  • Minimum Lumpsum: ₹5,000
  • Expense Ratio: 0.29
  • Benchmark: CRISIL Liquid Fund TR INR
  • Risk Level: Moderate Risk
  • AMC: ICICI Mutual Funds

2. Aditya Birla Sun Life Savings Fund for SIP

Aditya Birla Sun Life Savings Fund aims to create monthly income through investments in debt and money market instruments. Income may be created by the receipt of coupon payments or the acquisition and sale of securities in the underlying portfolio.

The scheme’s investment emphasis will be on identifying enterprises with a strong competitive position, solid businesses, and good management. The investment approach would concentrate on securities with consistently high yields and little risk.

Scripbox recommends the scheme under the ultra-short duration debt funds category for an investment duration of 1 year.   The fund was introduced in 2001 and outperforms its competitors by a substantial margin.   Although the instruments’ credit quality is below average, the issuers are rather strong. The market-determined risk and credit quality deviation are among the lowest in the category.

Fund Details

  • Minimum SIP Amount: ₹1,000
  • Minimum Lumpsum: ₹5,000
  • Expense Ratio: 0.49
  • Benchmark: NIFTY Ultra Short Duration Debt TR INR
  • Risk Level: Moderate Risk
  • AMC: Aditya Birla Sun Life Mutual Funs

3. Aditya Birla Sun Life Money Manager Fund for SIP

Aditya Birla Sun Life Money Manager Fund invests in money market securities that trade on the secondary market. Despite not guaranteeing profits, these investments generate a consistent return that is typically seen as risk-free due to the excellent quality of the underlying securities. The fund best suits risk-averse investors having an investment horizon of one year.

The scheme’s primary objective is to create consistent income by investing primarily in floating-rate debt and money market instruments. The program will seek to maximize the risk-reward proposition for the benefit of investors.

Scripbox suggests Aditya Birla Sun Life Money Manager Fund investing in the fund under the category of floating rate mutual funds. ABSL Money Manager fund was established in 2005 and has the second-largest average assets under management. Over the period, the fund topped the charts. The fund’s return predictability is average, and it has one of the lowest market-based risks.

Fund Details

  • Minimum SIP Amount: ₹1,000
  • Minimum Lumpsum: ₹5,000
  • Expense Ratio: 0.33%
  • Benchmark: NIFTY Ultra Short Duration Debt TR INR
  • Risk Level: Moderate Risk
  • AMC: Aditya Birla Sun Life Mutual Funds

4. HDFC Overnight Fund for SIP

The HDFC Overnight Fund is a debt mutual fund that invests in overnight fixed income securities. The fund’s corpus is invested in Collateralized Borrowing & Lending Obligations (CBLO), overnight reverse repo, and other fixed income securities. Furthermore, this fund is ideal for an investment horizon of one year.

HDFC Overnight Fund seeks to create profits by investing in debt and money market instruments having overnight maturities. Scripbox suggests investing in HDFC Overnight Fund among the liquid-debt mutual fund category.

The fund was introduced in 2002 and has the highest average assets under management in its category. In Scripbox’s opinion, the fund manager has maintained a solid and consistent credit quality profile over the past five years.

As per the standard deviation of the YTM, this fund has the lowest market-determined risk (Liquidity risk & Credit risk). Overall, the fund management has ensured safety without sacrificing profits.

Fund Details

  • Minimum SIP Amount: ₹1,000
  • Minimum Lumpsum: ₹5,000
  • Expense Ratio: 0.20%
  • Benchmark: CRISIL Overnight Index TR INR
  • Risk Level: Low Risk
  • AMC: HDFC Mutual Funds

5. HDFC Floating Rate Debt Wholesale Plan for SIP

The HDFC Floating Rate Debt Wholesale Plan Fund generally invests in floating-rate debt, fixed-rate debt securities with floating-rate returns swapped, and money market products. Principally it invests in bonds whose interest rate fluctuates with the current interest rate of the economy. Due to their investment mandate, these funds are often less volatile in response to changing interest rates. They may be a viable option for the fixed-income portion of your portfolio.

Scripbox suggests investing in the HDFC Floating Rate Debt Wholesale Plan Fund within the category of floating rate mutual funds. The fund was introduced in 2007 and has the highest average assets under management in its category. In Scripbox’s opinion, the fund has the lowest market-based risk.

Fund Details

  • Minimum SIP Amount: ₹1,000
  • Minimum Lumpsum: ₹5,000
  • Expense Ratio: 0.48%
  • Benchmark: NIFTY Low Duration Debt Index TR INR
  • Risk Level: Low Risk
  • AMC: HDFC Mutual Funds

Things to Consider While Choosing SIP Plans for 1 Year

SIPs are often suitable for the medium to long term as you can benefit from the power of compounding. Furthermore, the SIP strategy helps you average out your investment costs. Since equity mutual funds are preferable for the long term, SIP works wonders. However, when it comes to short term duration, like 1 year, investing in debt mutual funds is preferable. Thus, the best SIP for 1 year will be better in debt funds such as liquid funds, low duration funds, ultra-short-term funds, etc.

Investors seeking regular income and growth at par with inflation can consider investing in these funds. These funds invest in low-risk debt securities. Thus, they are suitable for investors looking for low volatile investments. Moreover, the returns from the schemes are stable and sometimes even higher than bank FDs. Therefore, the funds are suitable for your short-term goals and are a good alternative to bank savings accounts and fixed deposits.

These funds are suitable for your emergency fund requirements. The main objective of an emergency is liquidity and capital protection. These debt schemes offer high liquidity and, at the same time, are low-risk investment options. Thus, you can invest in these schemes and create an emergency fund for yourself.

Furthermore, Scripbox’s SIP Calculator helps you estimate the potential returns from a fund. The calculator estimates the returns on the basis of the fund’s historical performance. The calculator gives tabular and graphical return estimations that you can use to analyze return estimates.

Also, the calculator estimates returns on three growth scenarios – above-average, average, and below-average. The calculator helps you test numerous investing possibilities and make informed investing decisions. 

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