Best SIP Plans 2016

In order to make schemes attractive and affordable for small investors, mutual fund companies offers SIP option.



One day my friend asked me about the best SIP Plans of 2016. He wanted to start a SIP as a beginner. SIP’s are super hit with small investors. But what makes SIP so popular?

Systematic investment plans (SIP’s) allows investors to invest gradually in mutual funds. Gradual investment, coupled with the benefit of compounding makes SIP a super-hit option. Small investors can buy mutual fund units by investing smaller amounts each month.

SIP is the best alternative to BIG lump-sum investment. Common men wants to invest their hard earned money, but due two big bottle necks they refrain themselves from investing. (1) Lack of funds and (2) Lack of investing know-how. Best SIP plans removes both these bottlenecks.

Best SIP plans allow small investors to invest smaller amounts under supervision of expert fund managers.

Investment in best SIP’s can start from as low as Rs 500/month.

This makes it extremely convenient for small investors to participate in the investment process. Moreover, the probability of losing money in SIP is also smaller.

The only care one should take in SIP’s is to stay invested for long term.

Investing in equity through SIP is ideal.

Direct investing in stocks has its own advantages and disadvantages. But for small investor, who lacks expertise, disadvantages are more dominant.

Investing indirectly in stocks through SIP route is best.

Investing in equity mutual fund through SIP is most likely to make more money than direct stocks investing.

What is Systematic Investment Plan (SIP)

Systematic Investment Plan Calculator

Monthly Contribution(In INR)
Interest Per Annum (%)
Time (in years)

SIP Appreciated Amount(In INR)

Advantage of Best SIP Plans

Systematic investment plan is an excellent way to build large corpus gradually.

In order to understand the advantage of SIP, lets take simple examples.

Consider that one can spare just Rs 1/month for SIP. We can use a magic table to evaluate the level of returns.

Rs 1/ Month 3Yrs 6Yrs 9Yrs 12Yrs 15Yrs
8.0% 40 92 158 242 348
10.0% 42 98 175 278 417
12.0% 43 105 194 322 504
14.0% 44 113 216 374 612

– Invests Rs 1/mon for next 3 years @8% return. Appreciated money will be approx. Rs 40.

Invests Rs 1,000/mon for next 3 years @8% return. Appreciated money will be approx Rs 40,000.

– Invests Rs 1/mon for next 9 years @12% return. Appreciated money will be Rs 194.

Invests Rs 10,000/mon for next 9 years @12% return. Appreciated money will be Rs 19,40,000.

– Invests Rs 1/mon for next 15 years @14% return. Appreciated money will be Rs 612.

Invests Rs 10,000/mon for next 15 years @14% return. Appreciated money will be Rs 61,20,000.

Example of Units Accumulation by investing in best SIP Plans

Month SIP Amount Per Month NAV No. of Units Purchased this month Previous Balance Units (Nos) Total Units (Nos) Market Value (Rs)
24,000 29,436
July 2000 73.9607 27.041 370.948 397.989 29,436
June 2000 72.5566 27.565 343.383 370.948 26,915
May 2000 62.6962 31.9 311.483 343.383 21,529
Apr 2000 63.1645 31.663 279.82 311.483 19,675
Mar 2000 61.5326 32.503 247.317 279.82 17,218
Feb 2000 57.1839 34.975 212.342 247.317 14,143
Jan 2000 58.1113 34.417 177.925 212.342 12,339
Dec 2000 60.0082 33.329 144.596 177.925 10,677
Nov 2000 58.4490 34.218 110.378 144.596 8,451
Oct 2000 55.7839 35.853 74.525 110.378 6,157
Sep 2000 55.6328 35.95 38.575 74.525 4,146
Aug 2000 51.8470 38.575 0 38.575 2,000

How to calculate return when invested in best SIP’s

Returns with SIP (systematic Investment Plan)

Systematic Investment Plan (SIP) Vs. Recurring Deposit (RD)

Some thoughtful person questioned, why invest in SIP and why not RD?

Recurring Deposit is more of a saving option than an investment option. Returns of RD will be very low compared to SIP in long term.

SIP allows small investors to invest in equity. Though its returns will be very volatile in short term, but long term gain is assured. SIP can give very high returns.

On one side we have RD whose returns are assured but its ROI is low. One other hand we have equity SIP whose returns are volatile but its ROI is very high (in long term).

When we talk about long term, what is the period?

SIP in equity fund should not be for less than 4-5 years. In short term, NAV of SIP will be volatile. But when held for 4-5 years, growth will be assured.

While on other hand RD is very completely risk free.

When one keeps money parked for long term in equity funds, the risk of loss reduces dramatically. Return of 12%-15% per annum starts becoming very predictable.

Lets take example of a diversified equity mutual fund – HDFC Top 200. Long term return of HDFC Top 200 is 19.78%.

Systematic Investment Plan (SIP)

Investing in best SIP plans requires no market timing

SIP Investment is automatic investment. One need not worry about timing the market.

In systematic investment plans, small investors invests small amount of money each month. This way they keep accumulating mutual fund units without worrying about price levels.

When price is low, more units get purchased. When price is high, less units are purchased. This process happens automatically.

In equity investment, timing the market is important. But investing in equity through SIP eliminates this requirement.

In order to gain maximum benefits, expert investors buy low and sell high.

But SIP’s does not care to time the market. Systematic investment plan use the principle of rupee cost averaging. It gives average returns irrespective of market performing bullish or bearish.

When market is costly (bullish) less units will be purchased by SIP. When market is cheap (bearish) more units will be purchased by SIP. This is what trained investor does, buy more when market is down.

Systematic investment plans eliminates the excuse of NOT Investing

People often give excuse that “I do not have enough money & time for investment”.

Monthly required to start a SIP is very small (Rs.500/month). So the money constraint is removed.

SIP invests money automatically without SELF intervention. So time constraint also gets eliminated.

Advantage of compounding of money by can be seen clearly in SIP (specially when horizon is long term).

When I was younger I did not used to invest money. But SIP built that ‘investment habit’ in me.

Not investing is a bad habit one must avoid it under all circumstance. Recurring deposit and SIP’s allows one to get rid of this bad habit is a very easy way.

SIP in Mutual Funds Vs SIP in Stocks

Yes, SIP in individual stocks is also possible.

But here the risk is higher than mutual funds.

A mutual fund portfolio consists of mix of several stocks. When one stock price falls its negativity can be balanced by others.

But SIP in individual stocks cannot offer this balancing act.

I consider both as a great tool to accumulate equity (gradually in long term). SIP allows us to buy stocks/funds systematically.

The act of automatic buying is done through ECS. If we can accumulate equity like this, there can be nothing better.

Now the question arises; when it is possible to buy stocks directly (with SIP) why to pay extra charges to mutual funds?

There can be several justification in favor of mutual fund SIP. But I will provide the one which is most important. When we invest in funds through SIP we need not bother about quality of stocks we are accumulating. This is responsibility of mutual fund manager. This is for what we pay them extra charges.

What is the easiest way to start systematic investment plan (SIP)?

If one has an online trading account then starting SIP becomes easy. Lets take an example of how AxisDirect can helps to start SIP. The procedure is simple.

Step1 is to select the AMC. In our example I have selected HDFC ASSET MANAGEMENT CO. LTD.

Step2 is to select the category of mutual fund. In our example I have selected EQUITY linked mutual fund.

Step3 is to select the Sub-Category of mutual fund. In our example I have selected DIVERSIFIED EQUITY fund.

Step4 – After entering 3 main parameters click the ‘Magnifying Glass’ unders Scheme Name. This will open a new pop-up window which which will all fund under the said sub-category. Select your preferable scheme. In our example I have selected HDFC PREMIER MULTI-CAP FUND-GROWTH.

Step5 is to select the monthly SIP amount & date start date of SIP. Period is months shall also be confirmed. If one selects a period of 60 months, it means the SIP will continue uninterrupted for next 5 years. Once done clicking on SUBMIT button SIP starts.

SIP (Systematic Investment Plan)

SIP (Systematic Investment Plan)

Final Words…

By merely investing Rs 1,000/month at interest rate of 9% p.a one can make you Rs 2.0 Lakhs in 10 years.

Same SIP amount will build Rs 6.7 lakhs in 20 years, Rs 18.5 lakhs in 30 years and Rs 44 lakhs in 40 years.

From these figures we can understand that more time we give to SIP the bigger will be the corpus.

Jack and Peter were two friends. Both is of 22 years of age. Jack decided to start a SIP to fund his after-retirement life. He stared with a decent sum of Rs 2,500/month in diversified equity fund. Diversified fund can generate return @ 11% p.a. After 38 years, when Jack will be 60 years of age the retirement fund will be Rs 1.5 crore.

Jack Rs 2,500 monthly investment Accumulated Savings Rs 1.5 Crore At 60 years of Age (in 38 years)

Peter realized the importance of saving and investing for retirement only 5 years later (at age of 27).

He began investing with the objective of accumulating Rs 1.5 crore. Perter must accumulate Rs 1.5 Crore by time he is 60 years of age. But in order to generate Rs 1.5 Crore in 33 years he out Rs 4,2000/month in SIP. He later on regretted and cursed himself for starting to invest late.

Peter Rs 4,200 monthly investment Accumulated Savings Rs 1.5 Crore At 60 years of Age (in 33 years)

So if you also want to become a crorepati by the time you retire, start investing now. Systematic Investment Plan (SIP) can be the best tool to reach the crorepati landmark.

Best SIP Plans of 2017 in India

These are top ranked mutual funds of India. Starting a SIP in these funds can be very profitable in long term
(Updated as on July’2017)

Fund VR Star Rating Launch Expense Ratio (%) Return (5Y) Net Asset (Cr.)
SBI Small & Mid Cap Fund 3 Sep-2009 2.38 32.17 691
DSP BlackRock Micro Cap Fund - Regular Plan 4 Jun-2007 2.34 31.96 5,818
Reliance Small Cap Fund 3 Sep-2010 2.03 31.93 3,767
Franklin India Smaller Companies Fund 4 Jan-2006 2.38 31.7 5,696
Mirae Asset Emerging Bluechip Fund - Regular Plan 5 Jul-2010 2.35 31.65 3,898
UTI Transportation and Logistics Fund - Apr-2004 2.54 30.93 1,125
Canara Robeco Emerging Equities Fund - Regular Plan 4 Mar-2005 2.35 29.32 1,896
SBI Magnum Midcap Fund 4 Mar-2005 2.03 29.07 3,733
L&T Midcap Fund 3 Aug-2004 2.3 28.29 950
Principal Emerging Bluechip Fund 4 Nov-2008 2.48 28.06 1,014




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Disclaimer: All blog posts of getmoneyrich.com are for information only. No blog posts should be considered as an investment advice or as a recommendation. The user must self-analyze all securities before investing in one.

About the Author

Mani
I am a Blogger with a passion for investment education. I started blogging in 2007-08. Blogging didn’t happened to me as a coincidence, it was a conscious decision. The idea with which I started blogging still stands true. In my starting days my finances remained tight. I was reading heavily about how to manage finance. One day I got hold of a book which my father gifted me in 2003. It was stacked below my graduation books. It was a small-thin book with its cover named "Rich Dad Poor Dad".....more

45 Comments on "Best SIP Plans 2016"

  1. Hi Mani,
    I was just googling how to earn 1 crore by Investing in SIP and found this amazing article. People should now invest in SIP for long term instead of searching multibagger stocks. SIP seems practical while multibagger stocks are uncertain.
    Thanks for sharing, keep posting similar stuff.

  2. I want to invest 500000 in Axis long term equity growth for 3 yr. how much will be the return

  3. christopher Kisku | February 26, 2017 at 11:32 am | Reply

    I want to invest Rs 500 per month for 5 years . Please, give me some ideas .

  4. I want invest 2500 to 10 years in sip please give idea

  5. I want invest 250 to 10years in sip,what i do??

  6. Dear Sir,

    By hdfc i have taken a 2000/- sip od three years but know i know that my sip will close after 3 tears. in this scheme my grought was not good. so that lamsum amount we leave in account.Can i transfer all amount in diffrent good sip if yes please guide me.

  7. Sir, I have been investing in HDFC Mutual Fund from last 4 years. I still have 1 year left since it is a 5-year SIP. By the reports, it is stated that the performance of this MF is relatively weak and suggested to switch to some other fund. How can I do that? Can I stop investing in HDFC with still 12 months left? If I want to invest in another MF, is there an option to take a 3-year SIP? Please suggest me.

  8. Nizarali Mahesania | September 16, 2016 at 9:46 pm | Reply

    Sir, from where we get CRISIL rating and high AUM of best mutual funds
    regards

  9. Birla Sunlife Frontline Equity Fund – Growth Option is the best scheme for SIP.

  10. Really nice written article….

  11. Pls suggest me at my number 09904346862

  12. Hi Gabbar,

    I want to invest 5k sip per month for 3 years…please suggest me some good funds which can give good returns for 3 years period. I can take some risk also. My goal is to take a car after 3 years

    Regards ,
    Nataraj

  13. sikander shokeen | July 29, 2016 at 9:25 pm | Reply

    I want to start sip best retruns and no risk and high retruns please contact me mobile no 7873408536

  14. Ram Krishna Pandey | June 27, 2016 at 10:36 pm | Reply

    Nice article !

  15. I didn’t know anything about Systematic investment plans (SIP) before reading this article. The author has explained the concept well. I have been always interest in small investments and SIP seems to be a perfect option. Those who are just stepping into the world of investment should try their luck with SIP as it is safest option we got.

  16. WaNT to invest in SIP a max of Rs 10000. for say 3 or 5 years. Pls suggest the best fund

  17. Systematic Investment Plans(SIPs) enable investors to make investments in mutual funds gradually. What makes SIP a popular option among small-time investors is that they have the benefit of gradual investment along with the benefit of compounding. Small investors can buy mutual fund units by making small investments on a monthly basis.

  18. mujhe 1000 rs. ka sip karna 20 years ke liye kisme karu aur kitna return approx. milega aur agar mujhe kuchh ho gaya mai dunia me nahin raha to mere paise ka kya hoga please tell me.

    • Choose a top CRISIL rated diversified equity mutual fund.

      During starting of SIP, you can choose a nomination.
      The nominee will get all the money in your behalf.

  19. Hello. Sir
    Me 1year ke liye mutual fund me invest karna chahta hu par month 500 rupis tho muje best return wala plain suggeste kariye plss .sir

  20. ashish v lathkar | October 17, 2015 at 9:58 pm | Reply

    I want to investment of 25000per month through sip for 10 years. Please suggests me best mutual fund company. My goal is 1crore rupees.

    • I am confused ,it will be my first SIP,from CRISIL top fund list i can not decide in which fund will be best for me. I am 41Yr.,F, want to invest very small amount as SIP in various fund for 15-20 Yr’s , please suggest me.

  21. my age 28 I am invest sip 10years 6000 per month
    pleez advice which mutul funds the best 2015

  22. Hi, I’ve invested in stocks, MF’s, gold, etc in the past. Due to certain change and demand of high investments elsewhere, I had to pull out all my investments and direct them elsewhere. I once again intend to start my investments in MF’s (SIP) as a starting point. Need suggestions on top 3-5 MF’s to invest in.

  23. Hi

    Needed your suggestion on my current MF portfolio and future plan:

    Current- Total Rs 10,000 monthly

    1) HDFC Top 200- Rs 2500
    2) HDFC Prudence- Rs 2500
    3) HDFC Balanced- Rs 2500
    4) IDFC Premier Equity A- Rs 2500

    Going forward- plan is to invest Rs 25,000 monthly. Investment horizon atleast 20 years- I am 34 now.

    a) Are the above MFs ok? HDFC Top 200 has been a laggard- should I continue or stay invested?

    b) I understand I am invested in two balanced funds- hdfc prudence and hdfc balanced- should I exit one or continue investing in both? Should I increase my contri?

    c) If I look at HDFC Top 200, balanced and prudence- am I right to say that I am overinvested in large caps ( ignoring the debt allocations of large caps) and trying to overheadge myself? I am 34 years now

    d) I like HDFC stable- moreover I am an NRI and already created HDFC Direct account- so easier to open a new SIP through HDFC- am I being foolish by investing only in HDFC AMC?

    e) I am planning to invest additional Rs 15,000 per month in SIPs and I am building a retirement corpus. Would adding more large cap and mid cap fund be good? my plans are as follows:

    Additional Rs 15,000 SIP monthly

    1) HDFC Midcap- Rs 2500
    2) Sundaram Select Midecap- Rs 5000
    3) Franklin bluechip- Rs 2500
    4) Any others (including increasing SIPs in exisiting MFs….would like to add varied and
    MFs which divrsify my porotfolio and gives aggressive returns….)- Rs 5000
    5) For debt- I am looking at PPF + NRE fixed deposits 1-2 years (both tax free)- should I consider liquid/ short term debt mfs?

    Regards

  24. Hi,

    I am 30 yr old married guy and having 3 Month old daughter. I earn 80k Per month and having below investment

    Term Insurance – HDFC Click2Protect Plus of 1 Cr (Taken Last month)
    LIC Whole Life Plan -(Taken in 2012) Premium around 24K/yr for 12 yrs to get 40Lac at Age 79.
    Health Insurance – ICICI PruLife Health Saver Plan for 5L per Year for Me, Wife and Baby.

    PF – Around 45000 per Annum + Equivalent Employer contribution (Since last 1 Yr)

    HL – around 4Lac pending. It will be cleared by June 2016.

    SIPs investment of total Rs. 8000/- per Month as below (All are planned for long term for around 20yr considering daughter’s education and marriege)
    On my name
    1) UTI midcap fund (G) Rs. 2000/- (From last 5 yrs)
    2) ICICI Tax Plan Regular (G) Rs. 2000/- (from last 2 Month)
    3) DSP Black Rock Tax saver fund Reg (G) Rs. 2000/- (from last 2 Month)
    On Wife name
    1) ICICI Pru value Discovery Reg (G) Rs. 1000/- (From last 4 yrs)
    2) HDFC Equity fund (G) Rs. 1000/- (From last 5 yrs)

    Please suggest on above investments and what kind of additional investment planning/modification should I do and where ?

  25. Hi. I am 27 years old.I have decided to invest Rs 10000 in 4 mutual funds( Rs 2500 each) (all growth funds) for 15 years.. is it a good move? What will be my approx maturity amount?? My funds are ICICI pru focused blue chip fund, hdfc top 200, ICICI dynamic growth and Birla sun life growth fund.. thank you

  26. Rameshwar Tarachand Wagh | April 5, 2015 at 1:09 pm | Reply

    Dear sir, I like your blog. I have already invest in four sip schemes. First sip schemes sbi Contra fund growth option in the year 2008 of rs 1000 pm upto till date. I really benefitted from it. Now in this year I again purchased three more sip schemes. two schemes of SBIMF emerging business fund and magnum equity fund of rs 1000 each pm.and fourth scheme ICICI prudential MF in Value Discovery Fund of rs 1000 pm. Sir, I would like to invest money in sip schemes for another best schemes for long term investment. Also suggest the difference between direct option and indirect option. Waiting for your reply

    • All mutual funds has 2 types of plans.
      One is Regular Plan (bought through agents) – Expense ratio is comparatively higher
      Other is Direct Plan (not bought through agents) – Expense ratio is comparatively lower

  27. Thank u Manish

  28. Thanks for ur valid information about SIP.

    I have one doubt choosing the SIP for long term plan,
    For long term SIP investment, which one is best Dividend reinvest plan or Growth plan?

    Advance Thanks

  29. great article. It will really help me in future

  30. Verghese Stephen | September 22, 2013 at 11:31 am | Reply

    I want to invest Rs. 1 lac each in 5 different SIP’s for 20 years.
    The total monthly investment in SIP’s would be Rs. 5lacs.
    Which SIP’s would you suggest?

  31. Rainier Fernandes | August 19, 2013 at 8:26 am | Reply

    Hi! I am 40 yrs old having a 1yr old baby wants to invest at least 2000 in SIP. Can you suggest the best investment plan which will be locked up for 20 years. This will be started from Jan 2014. Kindly advise.
    Regards
    Rainier Fernandes

  32. investment plans | October 4, 2012 at 9:49 am | Reply

    nice article about finance and investing,

  33. Hi! I stumbled across this site through accident. Your article was an excellent read for somebody who doesn’t understand anything about finance or investing. Although, I would like to ask you a question.. I am about to be 29years old now. I have 2 debts – a credit card (60k) and a loan from a friend (60k). How do I take my life forward?

  34. Virgilio Tepezano | July 12, 2012 at 12:36 pm | Reply

    Excellent read, I just passed this onto a friend who was doing some research on that. And he just bought me lunch as I found it for him smile Therefore let me rephrase that: Thank you for lunch!

  35. I want to start monthly investment plan
    Plz contact me

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