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Best SIP Plans in India 2020 – Top SIP Mutual Funds to Invest

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Best SIP Plans in India 2020: Best Systematic Investment Plan (SIP) is a smart tool for investing in mutual funds. SIPs make your mutual fund investments hassle-free and straightforward. You can start by investing a fixed sum at regular intervals, say weekly, monthly, or quarterly.

1. What are Mutual Funds?

Mutual funds are formed when a fund house or asset management company (AMC) pools investments from several individuals and institutional investors having common investment objectives to purchase securities. The professional managing the pooled investment is called the fund manager. The funds are classified based on equity exposure. Mutual fund investments are diversified to offset risk and potential losses.

2. How Do Mutual Funds Work?

Mutual funds are straightforward to understand. As an investor, you invest with a fund house, which pools investments from other individuals having similar investment goals. The fund created is managed by a professional having a good track record and immense knowledge of financial markets. The objective of the fund management is to achieve growth through strategic investments. A certain number of fund units will be assigned based on the quantum of investment. Asset Management Company (AMC) will manage your investment by investing in various schemes that are operated by the mutual fund. The fund house also offers services such as consulting, advisory, customer service, marketing, accounting, and sales functions for the schemes.

3. What is SIP?

Systematic Investment Plan (SIP) is a smart way of investing in mutual funds. SIPs make investing in mutual funds hassle-free and straightforward. You can invest a fixed sum at regular intervals, say weekly, monthly, or quarterly. This staggered way of investing helps to instil a sense of financial discipline in the long run and also ensures a wealthy future. It is particularly useful because of its flexibility. The SIP amount is auto-debited from your bank account and invested in your mutual fund scheme. With every SIP, additional units of the mutual funds are purchased at the prevailing Net Asset Value (NAV) and added to your account and profile. You get the benefit of Rupee Cost Averaging and the power of compounding.

4. How is SIP Better than Lump Sum?

SIP and lump sum are the two ways of investing in mutual funds. Both SIP and lump sum investments have their own set of merits and demerits. In the end, it all boils down to the financial goal of the investors. SIPs can be encouraged for all investors regardless of their age. At the same time, lump-sum investments are advisable only to those investors that are focused on wealth accumulation in the long run. In a SIP, generally, the investors don’t need gains to reflect immediately but eventually overtime. SIP entails a fixed sum at regular intervals, regardless of what the market situation is, and investors tend to buy more units when the market plays low automatically. This leads to a lower average price translating to higher returns. With the lump sum investment, you are faced with the market at a particular cycle where the market rates may or may not be down. Having the advantage to invest at an average price over time makes SIP a better option. SIP is the safer option between the two in volatile markets as you invest with no fear of the markets. In the case of a lump sum, monitoring the market movements is utmost important.

5. Why Invest in Best SIP Mutual Funds?

Investing in SIP is an excellent way of accomplishing your long-term and short-term financial goals. One of the significant reasons to invest in SIP is to build the habit of saving and investing. It helps in being financially disciplined. Also, it protects you from the market risks and cycles that might impact the fund portfolio to some extent.

6. Best SIP Equity Funds India 2020

Following are some of the best SIP options. The funds shortlisted here are purely based on the 5-year annualised returns. Remember, mutual funds are subject to market risk and require careful consideration before investing. ClearTax does not endorse any of the funds.

 

Fund Name

5-Year Returns

Link

Mirae Asset Large Cap Fund Regular Growth

8.37%

Invest Now

Axis Blue Chip Fund

8.81%

Invest Now

ICICI Prudential Bluechip Fund Growth

6.07%

Invest Now

SBI Bluechip Fund Regular Growth

5.29%

Invest Now

Aditya Birla Sun Life Frontline Equity Fund Growth

4.59%

Invest Now

7. Best SIP Debt Funds 2020

 

Fund Name

5-Year Returns

Link

Aditya Birla Sun Life Savings Fund Growth Regular Plan

8.13%

Invest Now

SBI Magnum Ultra Short Duration Fund Regular Growth

7.51%

Invest Now

Nippon India Low Duration Fund Growth

7.50%

Invest Now

UTI – Short Term Income Fund – Regular Plan – Growth Option

5.79%

Invest Now

UTI – Treasury Advantage Fund – Regular Plan – Growth Option

5.42%

Invest Now