Best SIP Mutual Fund Plans in 2022
The SIP is a feasible investment method that enables individuals to invest a fixed amount periodically in mutual funds. Investments can be made yearly, quarterly, monthly, weekly, or daily. Mutual funds are purchased with a set amount deducted from the investor’s account. There are several mutual funds with minimum SIP amounts as low as Rs. 100 and Rs. 500.
SIP mutual funds are successful investing strategies that enable investors to plan investments based on their needs and financial objectives. Additionally, systematic investment plans teach you how to manage your finances. Mutual funds primarily allow investing via a SIP, a lump sum, or both.
What is the Best SIP Mutual Fund?
Most investors, especially the youth, prefer SIP funds. It allows you to dedicate a small amount periodically instead of investing a large amount at once. The amount of the SIP plan depends on the mutual fund you choose. You can set the SIP amount as low as Rs. 100 per month to as high as Rs. 10,000 per month.
The systematic investment plan has many advantages, but one of the most important is that it assures that the investor develops a regular saving routine of a set amount. Investors can consistently invest tiny SIP amounts and generate SIP profits over time. It helps inexperienced or small investors get accustomed to financial planning and is favourable to them.
Top 10 Mutual Funds with Minimum SIP
You can start a SIP plan in almost any mutual fund. The best SIP mutual fund will depend on your investment objectives, especially the amount you wish to invest. The risk, past performance, potential for future growth, NAV, AUM, tax, and exit load are some other elements that can help you choose the best SIP mutual fund. To make that easy for you, here is a list of the top 10 mutual funds with minimum SIP plans.
| S. No | Mutual Fund | AUM | Expense Ratio | 3-Year Return | 5-Year Return | Minimum SIP |
| 1. | Nippon India Growth Fund Direct-Growth | Rs. 13,225 crores | 1.2% | 32.55% | 23.30% | Rs. 100 |
| 2. | Nippon India Small Cap Fund Direct-Growth | Rs. 21,655 crores | 1.02% | 43.67% | 28.80% | Rs. 500 |
| 3. | IDFC Sterling Value Fund Direct Plan-Growth | Rs. 4,906 crores | 0.85% | 35.65% | 22.12% | Rs. 100 |
| 4. | ICICI Prudential Equity & Debt Fund Direct-Growth | Rs. 20,360 crores | 1.24% | 26.89% | 19.66% | Rs. 100 |
| 5. | Sundaram Multi Cap Fund Direct-Growth | Rs. 1,903 crores | 0.97% | 27.77% | 0.97% | Rs. 100 |
| 6. | SBI Bluechip Direct Plan-Growth | Rs. 34,043 crores | 0.95% | 21.05% | 16.12% | Rs. 500 |
| 7. | UTI Mastershare Direct-Growth | Rs. 10,570 crores | 1.04% | 19.80% | 15.96% | Rs. 100 |
| 8. | HDFC Flexi Cap Direct Plan-Growth | Rs. 30,473 crores | 1.05% | 29.36% | 19.68% | Rs. 100 |
| 9. | ICICI Prudential Bluechip Fund Direct-Growth | Rs. 33,739 crores | 1.05% | 21.36% | 16.23% | Rs. 100 |
| 10. | IDFC Core Equity Fund Direct-Growth | Rs. 2,416 crores | 0.85% | 24.06% | 17.02% | Rs. 100 |
Types of SIP Plans
Top-up SIP
You can gradually increase your investment amount with this SIP plan. This plan also allows you to maximize your SIP mutual fund investment by making periodic contributions to high-performing mutual fund schemes. You can increase the amount you invest as you deem suitable.
Perpetual SIP
If an investor leaves the end date blank on the SIP form, the SIP runs indefinitely. Investment can always be withdrawn as needed. But to preserve financial restraint and achieve financial objectives, it is usually advisable to choose an end date for SIPs.
Flexible SIP
In this SIP plan, you can alter your investment amount per your cash flow. You can skip one or more instalments if you run into financial difficulties. And, when you earn a bonus or increased income, you can also contribute more to your SIP account.
Trigger SIP
These SIPs plans are the best for beginners. Investors can set the NAV, index level, start date, and termination date. However, this kind of SIP fuels speculation and is frequently discouraged.
Benefits of SIP Mutual Funds
SIP mutual funds have many significant benefits; some of them are:
Low-cost Investment
The best SIP plan lets investors with limited capital increase long-term returns by utilizing their small monthly payments. With as little as Rs. 100, investors can begin investing in SIP mutual funds. Additionally, there is no upper limit on the maximum investment amount in SIP investments.
Rupee Cost Averaging
Investors do not need to time the market because they can purchase more units when it is performing poorly and fewer units when it is performing well. This factor lowers the overall investment cost.
SIP Flexibility
You have total control over your investments with the best SIP investing plan. A SIP can be started or stopped whenever you like. A SIP can also be put on hold and then started back up at a later time. You won’t find this kind of versatility with any other investment plan.
Power of compounding
In contrast to investing in a bulk payment, the investment automation provided by SIP ensures you never miss out on your investments. Small contributions add to a sizable corpus over time, and rewards are compounded.
Better Financial Discipline
SIP investment plans encourage participants to develop disciplined investing habits by compelling them to make regular, predetermined investments of a set amount of money at predetermined periods. Additionally, investors cannot skip an investment with the option of automatic payment because the money is automatically debited from the bank account.
Mistakes to Avoid Before Investing in SIP Plans
High Investment Amount
You can invest tiny sums of money consistently in mutual funds through SIPs, so be careful not to choose an investment quantity that you might not be able to maintain for the remainder of the year.
Unrealistic Investment Goals
Immature investors sometimes establish improbable investment targets before regretting them. You must not set unrealistic goals for the future of your current investment. Instead, you want to plan on average returns and keep making regular investments.
Discontinuing the SIP
Investors should constantly remember that to maximize returns, equity mutual fund investments should be made with a long-term perspective. If your portfolio is losing money, it is best to disregard it and keep going with the SIP.
Not monitoring the SIP Regularly
Investors frequently make the error of neglecting to track or keep an eye on their SIPs. Remember that regular monitoring is necessary for even the best funds with the best fund managers.
Conclusion
One of the most impressive aspects of SIP investment is the possibility to invest as little as Rs. 100 every month. By keeping the minimum requirement low, the scope automatically grows. Mutual fund investments are viable for those with a small corpus, including young adults just breaking into the workforce and even kids who depend on their parents for pocket money.
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