Best SIP Mutual Fund Plans
5paisa Research Team
Last Updated: 27 Mar, 2024 04:41 PM IST
Want to start your Investment Journey?
Content
- Introduction
- Best SIP Mutual Fund Plans in India in 2022
- Who Should Invest in Best SIP Mutual Funds?
- Factors to Consider Before Investing in SIP
- Advantages of Best SIP Mutual Funds
- Taxability of Best SIP Mutual Fund
Introduction
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.
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.
More About Mutual Funds
- NPS vs ELSS
- XIRR vs CAGR: Understanding Investment Return Metrics
- SWP and Dividend Plan
- What is Solution Oriented Mutual Funds?
- Growth Vs Dividend Reinvestment Option
- Annual vs Trailing vs Rolling Returns
- How to Get Capital Gain Statement for Mutual Funds
- Mutual Funds Vs Real Estate
- Mutual Funds vs. Hedge Funds
- Target Maturity Funds
- How to Check Mutual Fund Status with Folio Number
- Oldest Mutual Funds In India
- History Of Mutual Funds In India
- How To Redeem ELSS Before 3 Years?
- Types of Index Funds
- Who Regulates Mutual Funds In India?
- Mutual Fund Vs. Share Market
- Absolute Return in Mutual Fund
- ELSS Lock in Period
- Treasury Bills Repurchase (TREPS)
- Target Date Fund
- Stock SIP vs Mutual Fund SIP
- ULIP vs ELSS
- Long Term Capital Gain Tax on Mutual Funds
- Smart Beta Funds
- Inverted Yield Curve
- Sinking Fund
- Risk-Return Trade-Off
- Registrar and Transfer Agents (RTA)
- Mutual Funds Overlap
- Mutual Fund Redemption
- Mark to Market (MTM)
- Information Ratio
- Difference Between ETF and Index Fund
- Difference Between Mutual Fund and Index Fund
- Top 10 High Return Mutual Funds
- Passive Mutual Funds
- Passive Funds vs Active Funds
- Consolidated Account Statement
- Mutual Funds Minimum Investment
- What is Open Ended Mutual Fund?
- What is Closed End Mutual Fund?
- Real-Estate Mutual Funds
- How to Stop SIP?
- How to Invest in SIP
- What is a Blue Chip Fund?
- What is XIRR in Mutual Funds?
- What is a Hedge Fund?
- Tax Treatment of Long Term Capital Gains
- What is SIP?
- NAV in Mutual Funds
- Advantages of Mutual Funds
- Stocks vs Mutual Funds
- What is STP in Mutual Fund
- How Mutual Fund Works?
- What is Mutual Fund NAV?
- What are Mutual Funds?
- Mutual Fund Cut Off Time
- Mutual Fund the Best Investment Option for Conservative Investors
- Advantages and Disadvantages of Mutual Funds
- How to Choose Mutual Funds in India?
- How to Invest In Mutual Funds?
- How to Calculate NAV of Mutual Fund?
- What Is CAGR In Mutual Funds?
- What is AUM in Mutual Fund
- Total Expense Ratio
- What is XIRR in Mutual Funds?
- What is SWP in Mutual Fund
- How to Calculate Mutual Fund Return?
- Gold Mutual Funds
- Tax On Mutual Fund Investment
- The Top Benefits and Drawbacks of The Rupee Cost Averaging Approach
- How to Start a SIP Investment?
- What Is SIP & How does SIP Work?
- Best SIP Plans for Long Term: How and Where to Invest
- Best SIP Mutual Fund Plans
- ELSS Vs SIP
- Top Fund Managers in India
- What is NFO?
- Difference Between ETF and Mutual Fund
- ULIPs VS Mutual Funds
- Direct Vs. Regular Mutual Funds: What’s The Difference?
- ELSS vs Equity Mutual Fund
- NPS vs Mutual Fund
- Can NRIs Invest in Mutual Funds?
- Mutual Funds Categorisation In India
- Everything You Need to Know About Small-Cap Funds
- What is Public Provident Fund ?
- What is Large Cap Mutual Fund ?
- What is Index Fund ?
- What is IDCW in Mutual Fund ?
- What is Hybrid Fund?
- What is Gilt Fund ?
- What is ELSS Fund ?
- What is Debt Funds?
- What is an Asset Management Company - A Thorough Explanation
- What are Mid Cap Funds
- Liquid Funds - What are Liquid Funds?
- A Beginner's Guide to Investing in Fund of Funds Read More
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer please Click here.