Best SIP Mutual Funds in 2020 - Best Performing SIP Funds in India
Best SIP Mutual Funds - Consider the best performing sip mutual funds to invest in 2020 with Scripbox.com. Find the list of best sip mutual funds in India on the basis of Returns, Latest Nav, Ratings, Performance etc.
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Best SIP Mutual Funds
Inflation beating returns
Create a large corpus of funds
Children’s college education
Inflation beating long term returns
Scripbox pre-selects the 4 best equity mutual fundutual fund schemes
Kotak Standard Multicap GrowthScripbox Recommended
₹ 26,049.43 CrFund Size
₹ 1,000Min Investment
Motilal Oswal Long Term Equity Fund - Regular Plan - GrowthScripbox Recommended
- Tax Saving
₹ 1,411.09 CrFund Size
₹ 500Min Investment
Mirae Asset Large Cap Fund Regular GrowthScripbox Recommended
- Large Cap
₹ 15,347.16 CrFund Size
₹ 1,000Min Investment
Axis Bluechip Fund GrowthScripbox Recommended
- Large Cap
₹ 12,716.81 CrFund Size
₹ 1,000Min Investment
Invesco India Growth Opportunities Fund - GrowthScripbox Recommended
₹ 2,282.43 CrFund Size
₹ 1,000Min Investment
Mirae Asset Tax Saver Fund -Regular Plan-GrowthScripbox Recommended
- Tax Saving
₹ 3,184.25 CrFund Size
₹ 500Min Investment
Long Term WealthInflation beating Growth Rate
What are Best SIPs in Mutual Funds?
A systematic investment plan (SIP) is the most popular approach to investment among investors in m. SIPs allow investing a fixed amount periodically in a mutual fund. Mutual fund SIPs have eliminated the need to time the market. Mutual fund investments have become comfortable. One of the most significant benefits of the systematic investment plan is that it ensures the investor gets into the habit of saving fixed amounts regularly. Investors need not worry about lump sum investments. They can invest small sip amounts regularly and earn returns over the long term.
The frequency of a SIP can be chosen by the investor depending on investment objective; it can be quarterly, monthly, bi-weekly, and weekly. Depending on the financial goal, an investor can choose any best mutual fund to invest through SIP.iInvesting small amounts regularly will help investors in long term wealth creation. An investor doesn’t have to worry about investing money every time, upon selecting a fund for SIP, the sip amount automatically gets debited from the bank account.
How do SIPs in Mutual Funds Work?
Mutual Fund SIPs investments are simple when you understand them right. SIPs allow investors to start investing with as low as INR 500 to an amount with no upper limit at certain fixed intervals of time. The frequency of investment can be monthly, quarterly, and weekly. SIP investments are compounded with time and earn higher returns.
To put it simply, SIP works in a way similar to that of a piggy bank. A child keeps depositing small amounts periodically, and over a period of time, they’ll end up having a large sum. This sum is usually spent by them to purchase their favorite toy or book or game. Similarly, SIPs inculcate investment discipline into investors and encourages them to save for a financial goal. The significant difference between the two is that the amount in a piggy bank stays idle. At the same time, SIPs investments are invested into particular asset classes through a mutual fund.
An investor with a lump sum investment amount can also invest through SIPs. This is through a Systematic Transfer Plan (STP). Here an investor can invest a lump sum amount in a liquid or a short term fund and select a frequency at which the amount can be transferred to an equity fund.
Redeeming SIPs can be done either in a lump sum or in a periodic manner. The periodic withdrawal is also known as the Systematic Withdrawal Plan (SWP), here the investor opts for regular pay-outs, which are credited to their bank account.
What are the Benefits of Investing in SIP of Mutual Funds?
Investing in SIPs comes with its own set of benefits.
Inculcates financial discipline
SIP, as the name suggests, is very systematic. Once an investor starts a SIP, he or she doesn’t have to worry about anything. SIPs are automated. The bank account gets debited every month. Hence this inculcates financial discipline in an investor.
Averaging cost of investment
With SIPs, investors invest across market cycles. During market highs, they get fewer units, and during a falling market, they get a higher number of units. The overall cost per unit comes down as the investment is averaged out.
Power of compounding
Investing for longer investment horizons help in earning more through the power of compounding.
Investors are expected to increase their investment amount every year in tandem with their increase in their income. Applying for a new SIP every year to increase the investment can be tedious. Hence SIP step up has been introduced. Investors can choose a percentage, or an amount step up every year right when they are applying for a SIP. Choosing a step-up option can help in increasing the returns and reaching the financial goal faster and also help in beating inflation.
No timing of market
SIPs can be started in a bullish or a bearish market. There is no need to time the market before entering it with SIP investment. The investment is not affected by market volatility. This is because the investment is spread across several years. This helps in averaging out the investment cost per unit, leading to higher returns.
Better financial planning
With SIP investing, one can plan their expenses better. Once they schedule their SIPs at the starting of the month, they can spend the rest of the money guilt free.
Invest with minimal amount
SIP investing allows investors to invest even with an amount as low as INR 500 per month.
Why Invest in SIP Mutual Funds?
Ms. Priya chooses to invest INR 5,000 through SIP for six months. While Mr. Pranav makes a lump sum investment of INR 30,000.
The above table shows that, over a period of six months, with the same total investment amount of INR 30,000, Priya has higher units when compared to Pranav. The average cost per unit is lower for Priya as she was able to bag more units when the prices were lower during the 6-month horizon. Continuing the SIP method of investing for the long term might reduce the average cost price further.
Simple and Convenient
In a SIP, all an investor has to do is select the frequency of the SIP and amount. The bank auto-debits the amount based on the choice of frequency. All the mutual fund SIPs can be tracked easily. SIPs also eliminate the worry to time the market each time an investor wants to invest. SIPs can be stopped anytime without much hassle.
Investing regularly for the long term is a good hedging strategy to address market fluctuations. Timing the market and worrying whether the purchase price is the lowest can be avoided entirely with SIPs. In instances where the investor has a fear that the fund is giving below-average returns, they can exit anytime and can choose another fund to make investments.
To save is no easy job, but it becomes comfortable with proper planning. Saving by investing regularly is the best habit, and every investor needs to inculcate it. Always attach a monetary value and time for the financial goals. The SIP amount should be in line with the timelines. This planning can go a long way and will make it very easy to achieve goals. Dreams will no longer just dream with SIPs.
Most investors lack discipline. Without a SIP, regular investments will always be in the planning phase. SIPs are a blessing for investors who wish to invest small amounts regularly. Investing small amounts today can go a long way in the future. Disciplined saving at an early age would help an investor retire sooner and peacefully without worrying about income and expenses. Cutting down on non-vital costs and investing would reap wonderful results.
Best Mutual Funds for SIP in India
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Frequently Asked Question
SIPs invest through different markets and hence manage the risk of investing in the wrong time of the market. But mutual funds are subject to market riskSIPs in itself aren’t risky, but the fund that the investor chooses might be on a higher risk level than what they can handle.
One can always withdraw money from their SIP investment. It’s called redeeming the investment. An exit load is charged if the redemption is done before one year from investing.
No, one cannot withdraw money from their ELSS investment before three years.
There are four types of SIPs, namely top-up SIP, flexible SIP, perpetual SIP, and trigger SIP. 1.Top-up SIP: This allows investors to increase their investment periodically as the income increases. This is also called a step-up SIP. 2.Flexible SIP: This allows the investor to increase or decrease the SIP amount and even allow to skip a SIP during a cash crunch. One can also increase the SIP amount during a bonus or additional income. 3.Perpetual SIP: If an investor doesn’t mention the end date in the SIP form, the SIP continues perpetually. One can always withdraw the investment whenever required. But it is always advised to set an end date for SIPs to maintain financial discipline and reach financial goals. 4.Trigger SIP: This type of SIP is ideal for investors with limited knowledge. It allows investors to set NAV, index level, start, and end date. But this type of SIP leads to speculation and is often discouraged.
There is no upper limit for investing in ELSS. But which considering tax savings, an investment in ELSS tax saving mutual funds are allowed as a deduction up to Rs 1.5 lakh only
Yes, withdrawal of tax saving mutual funds is allowed at the maturity of the funds. The units available for redemption can be redeemed. But a premature withdrawal of funds before 3 years of lock-in period is not allowed
Equity-linked mutual funds ELSS are the funds which are allowed as a deduction up to Rs 1.5 lakh and the capital gains up to Rs 1 lakh are tax-free.