One of the two ways to invest in mutual funds is through a SIP or systematic investment strategy. Another choice for investing in mutual funds is to make a one-time payment. When you invest in mutual funds through the best sip, you can spread out your savings and invest a small amount on a regular basis.

What are the Best SIP Plans?

Before we proceed to know SIPs, let’s first understand mutual funds. An open-end fund is made when a pooling entity (fund house or asset management company) pools investment from several individuals and institutional investors with common investment objectives to get securities. Mutual funds are broadly classified into equity funds, debt funds, and balanced/hybrid funds counting on the quantity of their equity exposure.

Investing in open-end funds via a SIP is advisable for first-time mutual fund investors because it helps them in instilling a way of monetary discipline by the end of the day. The frequency of your SIP investment is often weekly, monthly, or quarterly, as per your comfort. Most millennials prefer taking the SIP route because it gives them a high degree of flexibility. Investing through SIPs compels you to line aside a hard and fast sum regularly, which is what’s needed to form investing a habit.

*You can see SIP Calculator to fast work out how small investments made at regular time period yield good returns over a long period of time. Also learn benefits of using SIP Calculator here.

How to invest in SIP plans?

 Investing is an art; it can do wonders if done right. Now that you know the Top SIP programs you need to know how to invest in them. We mentioned the investment steps in the SIP below.

1. Review your financial goals Choose a SIP investment that fits your financial goals. For example, if your goal is short-term (if you want to buy a car for the next 2 years), you should invest in Debt Mutual Funds. Also, if your goal is long-term (such as retirement planning) then choose to invest in Equity Mutual Funds.

 2. Choose an investment timeline This will ensure that you are investing the right amount of money in a timely manner.

3. Determine the amount of money you wish to invest per month Since SIP is a monthly investment, you should choose the amount that you will be able to invest each month without Fail. You can also calculate the appropriate value as your goal using a calculator or SIP calculation calculator.

 4. Choose the best SIP plan Make a good investment choice by consulting a financial advisor or by choosing the Best SIP Programs offered by various online investment forums.

Best SIP Plans Evaluation

Multiple factors must be considered when determining the best SIP Mutual Funds:

  • See the fund’s past success here: The rate of return and post-tax income of a fund can be determined by looking at its past performance over a period of 5 years or more.
  • Compare the fund’s performance to that of other funds in its category: A successful fund would outperform its benchmark as well as other funds in the same group.
  • Learn about the fund manager’s experience and track record by doing the following: It can be useful to gain more insight into a fund manager’s approach. Keep an eye out for shifts in investment priorities, regular rebalancing, and other related occurrences.
  • Recognize the industries and businesses in which the mutual fund invests: Determine if the fund is investing in thriving industries such as financials and technology, as opposed to pandemic-affected industries such as retail and aviation. This could be critical if you want to invest in SIPs.
  • Check out the asset management firm’s declaration of the fund’s goal: The fund goal will assist you in deciding whether or not to participate in a mutual fund SIP.

Who all can Invest in the Best SIP plans?

All individuals can invest in mutual funds by SIPs. SIPs are especially recommended for first-time buyers. You will see what mutual funds are capable of by investing in them through a systematic investment strategy (SIP). Also, if you’re new to the world of equity-linked investments, a SIP investment in mutual funds is a good place to start.

Investing in a systematic investment plan (SIP) eliminated the need to set aside a lump sum. As a result, you can begin your investment journey with a modest amount. There are mutual fund plans that allow you to invest as little as Rs 100 per month through a systematic investment plan (SIP). Most other investment options do not have this option.

 SIPs Better Than Lump Sum: How?

Investing in a lump sum necessitates the preparation of a large sum of money, such as Rs 50,000. A lump sum investment in a mutual fund scheme is equivalent to a bank fixed deposit. Investing via a SIP, on the other hand, does not require a large initial investment. As previously mentioned, you can begin your investment journey with as little as Rs 100 per month.

If you want to maximize the return on your lump-sum investment, you must time the markets. Lump-sum investments can only be made when the stocks have reached rock bottom and are expected to rise in the coming days. Investing in mutual funds through a systematic investment plan (SIP) eliminates the need to time the markets because you would benefit from rupee cost averaging over time.

Benefits of Best SIP Mutual Funds

Investing in joint ventures through SIP brings many benefits. The following are some of the key investment benefits of SIP joint ventures:

  • Rupee cost averaging

Investing in joint ventures gives you an average cost of rand. That is, you buy smaller units when the markets grow while you buy more units when the markets are in a bearish trend. Over time, the cost of purchasing your wallet bags is moderate and it turns out to be on the lower side. Therefore, you do not need time to market.

  • You can invest less

As mentioned earlier, investing through SIP reduces the need to have the amount of money you have to start your investment journey. The average investment amount is Rs 500. Some funds allow you to invest at least Rs 100 per month. Therefore, the value of the investment is not the first obstacle to your mutual investment.

  • Flexibility

SIPs give you much-needed flexibility. You can start or stop the SIP at any time, and the wallet has no say in this. If you are using a tight budget, you may also choose to temporarily suspend your SIP. All of these come for free.

  • You can start multiple SIPs at a time

You can start and use SIPs in many collaborative programs alike. Therefore, you can benefit from various mutual fund programs at a time. However, you need to be careful about which investment you choose.

Taxability of Best SIP Mutual Fund

No matter what investment method (SIP or total amount), the same tax rules apply. Combined cash benefits are added to your gross income and are taxed in the form of a tax liability that you fall under.

  • Taxation of equity funds

Equity Fund units released over a one-year holding period will result in temporary cash gain. These benefits are taxable at a minimum rate of 15%. You make a long-term profit if you redeem your wallet units after a one-year holding period. Long-term gains of up to Rs 1 lakh per year are tax deductible. Any long-term gains above this limit are taxed at 10%, with no indexation profit. Units purchased through SIPs are first redeemed, and the above tax laws apply.

If you invest in a fund for two years and decide to use all your investments at the same time at the end of two years, then profits from units held for more than a year are charged as long-term gains while the balance is charged as short-term gains.

  • Taxation of debt funds

Debt fund units used over a three-year period result in temporary funding. These benefits are added to your income and are taxed in the form of a tax liability that you fall under. Long-term cash gain is achieved when you redeem your credit card units after a three-year holding period. These benefits are taxable at the rate of 20, with the indexation benefit.

If you invest in a debt fund for four years and decide to use all your investments at the same time at the end of four years, then benefits from units held for more than three years are charged as long-term gains while the balance is charged as short-term gains.

  • Taxation of hybrid funds

If the equity exposure is greater than 65 percent, the equity funds taxation laws apply. If not, the investment would be charged as a debt fund.

Best SIP Plans for the Year 2021

*A list of the best mutual funds is available. SIPs in the Equity Group of mutual funds with a Net Assets/ AUM of more than 200 Crore are ordered based on 5-year calendar year returns.

Aditya Birla Sun Life Digital India Fund 

A multi-sector open-ended growth scheme focused on investing in technology and technology-dependent businesses, hardware, peripherals and components, software, telecom, media, internet, and e-commerce, as well as other technology-enabled companies, with the goal of long-term capital growth through a portfolio with a target allocation of 100 percent equity. The secondary goal is to generate profits and distribute dividends.

Mirae Asset Emerging Bluechip Fund 

The scheme’s investment target is to produce income and capital appreciation by investing primarily in Indian equities and equity-related securities of large and mid-cap companies at the time of investment. To achieve optimal Portfolio construction, the fund manager can seek participation in other Indian equity and equity-related securities from time to time. The Scheme does not promise or guarantee any specific returns.

TATA Digital India Fund  

TATA Digital India Fund is an initiative of TATA Group.

The scheme’s investment objective is to seek long-term capital appreciation by investing at least 80% of its net assets in equity and equity-related instruments of companies in India’s Information Technology market.

However, there is no certainty or guarantee that the Scheme’s investment target will be met.

Returns are not guaranteed or assured under the Scheme.

SBI Banking & Financial Services Fund 

The scheme’s investment objective is to provide long-term capital appreciation to unitholders through a portfolio that is primarily comprised of equity and equity-related securities of banking and financial services companies. However, there is no guarantee that the Scheme’s investment goal will be met.

 Nippon India Small Cap Fund

The scheme’s primary investment goal is to generate long-term capital appreciation by investing primarily in small-cap equity and equity-related instruments, with a secondary goal of generating consistent returns by investing in debt and money market securities.

SBI Magnum COMMA Fund 

To create opportunities for growth and consistent returns by investing primarily in a portfolio of stocks of commodity-related companies in the following sectors: Oil & Gas, Metals, Materials & Agriculture, as well as debt and money market instruments.

Conclusion

There’s no other way to invest with fair diversification for as little as Rs 100 or even Rs50. Many mutual funds offer SIPs (Systematic Investment Plans) that allow you to invest as little as Rs 100 or Rs 500. Start Investing today with WealthBucket today!

By averaging the cost of investments, a systematic Investment Plan (SIP) helps you eliminate the risk of market timing and facilitates wealth development in a disciplined manner. Small savings add up to a sizable potential fund. WealthBucket gives best sip plans  and range of services related to the mutual funds, Equity Mutual FundsDebt mutual fundLarge Cap mutual fund or Multi-Cap mutual fund.

Call us at +91 8750005655. Or email your queries at contact@wealthbucket.in.

You may also like to know about:

SIP calculator: How does it work
How a Mutual Funds Calculator works
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