List of Best Mutual Funds for SIP in 2025

Mutual funds offer investors a way to diversify their portfolios, even with limited capital. This is where SIP in mutual funds comes in. Investing in mutual funds via the Systematic Investment Plan (SIP) helps individuals select a mutual fund that is aligned with their preferences. Thus, the SIP (Systematic Investment Plan) route is especially beneficial for those who want to beat inflation and benefit from the stock market’s gradual growth over time. In this blog, we will learn what is a SIP and how does it work. We will also explore the top SIP mutual funds and how you can invest in them.

Top 10 Best Mutual Funds for SIP (Based on 3Y CAGR)

Here is a list of some of the best performing mutual funds in India.

Fund Name	Sub Category	AUM (in Cr.)	CAGR 3Y (%)	Expense Ratio (%)
SBI PSU Fund	Thematic Fund	4,572.13	33.38	0.74
Motilal Oswal Midcap Fund	Mid Cap Fund	26,421.09	33.29	0.54
ICICI Pru Infrastructure Fund	Sectoral Fund - Infrastructure	6,910.52	31.78	1.21
Aditya Birla SL PSU Equity Fund	Thematic Fund	5,236.98	31.69	0.53
LIC MF Infra Fund	Sectoral Fund - Infrastructure	927.50	31.49	1.06
ICICI Pru Bharat 22 FOF	FoFs (Domestic) - Equity Oriented	2,218.52	31.47	0.12
Invesco India PSU Equity Fund	Thematic Fund	1,285.76	31.43	0.85
HDFC Infrastructure Fund	Sectoral Fund - Infrastructure	2,464.93	30.15	1.09
DSP India T.I.G.E.R Fund	Sectoral Fund - Infrastructure	5,515.28	30.10	0.84
Nippon India Power & Infra Fund	Sectoral Fund - Energy & Power	7,453.12	29.62	0.95

Disclaimer: Please note that the above table is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.

Note: The data on the list of the best mutual funds for SIP is from 9th January 2025 and is derived from Tickertape Mutual Fund Screener.

🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.

Top 10 Mutual Funds for SIP to Invest in 2025: An Overview

If you’re wondering ‘which mutual fund is best’, here is an overview of the top 10 mutual funds in India.

SBI PSU Fund

The SBI PSU Fund, launched in July 2010, is a thematic mutual fund focusing on investments in Public Sector Undertakings (PSUs) across various sectors. It aims to provide capital appreciation by targeting opportunities within the PSU space.

As of 9th January 2025, the fund’s AUM is Rs. 4,572.13 cr., with a 3-year CAGR of 33.38%. The expense ratio is 0.74%.

Motilal Oswal Midcap Fund

Launched in February 2014, the Motilal Oswal Midcap Fund invests in mid-cap companies with the potential for growth and capital appreciation. The fund provides exposure to businesses positioned in the mid-cap segment of the market.

As of 9th January 2025, the fund has an AUM of Rs. 26,421.09 cr. Its 3-year CAGR is 33.29%, and the expense ratio is 0.54%.

ICICI Prudential Infrastructure Fund

The ICICI Prudential Infrastructure Fund, introduced in August 2005, is a sectoral fund focusing on infrastructure-related companies. The fund invests in businesses operating within construction, energy, and engineering sectors, among others.

As of 9th January 2025, the fund’s AUM is Rs. 6,910.52 cr., with a 3-year CAGR of 31.78% and an expense ratio of 1.21%.

Aditya Birla SL PSU Equity Fund

Launched in March 2007, the Aditya Birla Sun Life PSU Equity Fund invests in Public Sector Undertakings (PSUs) across various industries. The fund targets companies with significant government ownership and potential for growth.

As of 9th January 2025, the fund’s AUM stands at Rs. 5,236.98 cr., with a 3-year CAGR of 31.69%. The expense ratio is 0.53%.

LIC MF Infrastructure Fund

The LIC MF Infrastructure Fund, launched in September 2009, focuses on infrastructure-related sectors. The fund’s portfolio includes investments in sectors such as construction, energy, and materials.

As of 9th January 2025, the fund manages an AUM of Rs. 927.50 cr. It has a 3-year CAGR of 31.49% and an expense ratio of 1.06%.

ICICI Prudential Bharat 22 FOF

Launched in November 2017, the ICICI Prudential Bharat 22 Fund of Funds (FOF) invests in the Bharat 22 Exchange Traded Fund, which is composed of 22 companies from different sectors, including PSUs and private companies.

As of 9th January 2025, the fund’s AUM is Rs. 2,218.52 cr., with a 3-year CAGR of 31.47%. The expense ratio is 0.12%.

Invesco India PSU Equity Fund

The Invesco India PSU Equity Fund, introduced in November 2009, is a thematic fund that invests in PSU companies across sectors. The fund seeks to capture growth potential within the PSU space.

As of 9th January 2025, the fund’s AUM is Rs. 1,285.76 cr., with a 3-year CAGR of 31.43%. The expense ratio is 0.85%.

HDFC Infrastructure Fund

Launched in March 2008, the HDFC Infrastructure Fund focuses on investments in infrastructure-related sectors, including energy, transportation, and construction. The fund targets opportunities in industries that contribute to infrastructure development.

As of 9th January 2025, the fund’s AUM is Rs. 2,464.93 cr., with a 3-year CAGR of 30.15%. The expense ratio is 1.09%.

DSP India T.I.G.E.R Fund

The DSP India T.I.G.E.R Fund, launched in May 2004, invests in infrastructure-focused companies and sectors. The fund’s portfolio includes businesses involved in engineering, construction, and energy.

As of 9th January 2025, the fund manages an AUM of Rs. 5,515.28 cr., with a 3-year CAGR of 30.10%. The expense ratio is 0.84%.

Nippon India Power & Infra Fund

Launched in May 2004, the Nippon India Power & Infrastructure Fund invests in companies involved in the power and infrastructure sectors. The fund aims to capture growth potential in these industries.

As of 9th January 2025, the fund’s AUM is Rs. 7,453.12 cr., with a 3-year CAGR of 29.62%. The expense ratio is 0.95%.

What is a SIP?

A Systematic Investment Plan (SIP) is a method of investing in mutual funds where you invest a fixed amount regularly, usually monthly or quarterly. SIPs offer a disciplined approach to investing, allowing you to benefit from rupee-cost averaging and the power of compounding over time. This makes a SIP instalment a convenient and effective way to build wealth gradually, without worrying about market timing or making a large one-time investment.

How to Invest in Mutual Funds for SIP

Investing through a Systematic Investment Plan (SIP) has never been easier, thanks to the ability to start a SIP online. To invest in the best performing mutual funds through SIP in India, follow these steps:

• Set Financial Goals: Determine your investment objectives.
• Choose a Mutual Fund: Research funds based on performance and risk.
• Select a Platform: Use an online investment platform, broker, or the AMC’s website.
• Complete KYC: Submit your KYC documents (ID proof, address proof).
• Start SIP: Choose the SIP amount, frequency (monthly/quarterly), and tenure.
• Track & Review: Regularly monitor your investment to ensure it aligns with your goals.

What are the Best SIP Mutual Funds to Invest in?

Now that you know how do SIPs work, investing becomes straightforward and flexible through a Systematic Investment Plan (SIP). In a mutual fund scheme, a set sum is automatically deducted from your savings or a current account on a monthly basis. Then, this amount is invested in your selected mutual fund. The benefits of a SIP, such as disciplined investing, rupee-cost averaging, and the power of compounding, make it one of the most effective ways to build long-term wealth

The investment scheme corresponds to a specific number of units in the chosen mutual fund, determined by the fund’s purchase price or Net Asset Value (NAV) on the date of the transaction. If you’re wondering which mutual fund is best for SIP, check out the top 10 SIP investments that often focus on funds that have demonstrated consistent performance, diversification across asset classes, and solid track records in delivering long-term returns.

Features of the Best SIP

Here are certain features of the best mutual fund to invest in for SIP:

• Consistent Historical Performance: Look for top mutual funds for SIP with a track record of consistent returns over various market cycles. While past performance doesn’t guarantee future returns, it may offer insights into a fund’s resilience.
• Low Expense Ratio: A lower expense ratio indicates cost efficiency. Funds with minimal fees allow investors to retain a higher share of their returns.
• Risk-Adjusted Returns: Assess the fund’s risk-adjusted returns, considering volatility compared to performance. If you’re wondering about the best mutual fund to invest in for long term, a favourable risk-reward balance is key for long-term success.
• Fund Manager Expertise: The proficiency of the fund manager is crucial. An experienced and skilled manager can navigate market nuances, adapting strategies for optimal results.
• Diversified Portfolio: A well-diversified portfolio mitigates risk. Funds spreading investments across sectors and asset classes offer a balanced approach to wealth accumulation.
• Liquidity: Opt for funds with sufficient liquidity. This ensures ease of buying or selling units, especially during market fluctuations.
• Transparent Communication: A fund with transparent communication about its strategy, holdings, and future plans fosters investor trust. Hence, regular updates and clear reporting can help in decision-making.

Who Should Invest in the Best SIP for MFs?

Determining the suitability of the best mutual funds for Systematic Investment Plans (SIP) depends on individual financial objectives and risk tolerance. SIPs are well-suited for those seeking a disciplined and gradual SIP investment plan approach, allowing investors to enter the market with smaller amounts regularly.

Investors with a long-term horizon benefit most from the best SIP plans to invest in India, as the strategy helps mitigate the impact of market volatility through rupee cost averaging. This approach is especially advantageous for individuals with stable income streams, as it enables consistent contributions.

Those aiming for financial goals like education, homeownership, or retirement can leverage the power of compounding by exploring the best SIP investment options available. While looking for the best SIP in the market, it’s crucial to align investment choices with one’s risk profile and financial aspirations, ensuring a strategic fit for long-term wealth creation. Therefore, potential investors should evaluate their financial circumstances and investment goals before investing in the best SIP plans to invest in for one year or above into their portfolio.

Factors to Consider Before Investing in the Best SIP to Invest in

Investing in the best performing mutual funds through SIP requires careful consideration of key factors:

1. Align with Your Needs:
Tailor your SIP investments to meet your financial goals. By starting with a small monthly amount, you can ease the financial burden compared to a lump sum investment. Utilise online resources to explore the 5 best and top SIP funds in 2025.

2. Diversify SIPs for Specific Goals:
Establish monthly SIP plans for each goal to gain a comprehensive view of your investment schemes. Identify the right strategy for each objective, considering the best mutual fund to invest for long term or top funds for SIP that align with your timeframe. Use a SIP Calculator to project potential returns from the best mutual funds to invest now, factoring in monthly investment, expected return rate, and the investment period.

3. Match Investments with Risk Tolerance:
Your risk appetite, influenced by factors such as discretionary income and investment horizon, plays a pivotal role. Align your investments with asset classes that suit your risk profile. For those seeking stability, exploring the best long term mutual funds or best mutual funds for SIP long term might be suitable options.

4. Regularly Assess Portfolio Performance:
It is important to review your SIP mutual fund portfolio every three to four years to identify the best performing SIPs. Routine evaluations help eliminate underperforming assets and boost overall portfolio returns, ensuring alignment with financial goals.

Risks Involved While Investing in the Best SIP to Invest In

Here are a few risks to consider while investing in the best mutual funds for SIP in 2025:

1. Market Fluctuations:
The performance of different types of SIPs is inherently linked to market movements. While historical data provides insights, economic conditions, global events, and interest rate changes can impact the returns of even the top 5 mutual funds for SIP.

2. Liquidity Risk:
Despite being designed for liquidity, unforeseen circumstances can impact redemption processes for the best mutual funds SIP. Although the best MF scheme for SIP instalment typically allows for easy exit, extreme market conditions or fund-specific issues may temporarily affect liquidity.

3. NAV Volatility:
Net Asset Value (NAV) represents the per-unit market value of a mutual fund on a specific date. NAV fluctuations can impact the overall returns of even the best SIP to invest 2025. Investors should consider how market-related risks influence the NAV of the SIPs they choose.

4. Fund-specific Risks:
Every investment, including a good mutual fund for SIP, carries certain risks. These may include concentration risks, overexposure to specific sectors, or changes in fund management. A detailed review of the fund’s offer document can help investors understand these risks better.

Benefits of Investing in the Best SIP

Investing in mutual fund systematic investment plans (SIPs) offers several advantages, making it a strategic choice for investors. Here’s a breakdown of the key benefits of a SIP:

1. SIP Top-Up

Instead of applying for a new SIP each year, you can opt for the SIP top-up option. This allows you to set a percentage or amount increase in your investment scheme annually. By doing so, you can achieve financial goals faster and effectively combat inflation. For those exploring the best SIP plans in India, the top-up option adds flexibility and ensures you stay ahead of inflation.

2. Market Timing Irrelevant

The best SIP to invest now, whether for 1 year, 3 years, or longer, eliminates the need to time the market during bullish or bearish phases. By investing over multiple years, you spread the risk and average out the cost per unit, leading to enhanced returns. This is especially true for the best mutual funds in India for SIP, which are designed to perform steadily despite market volatility.

3. Financial Discipline

True to its name, investing in SIP fosters financial discipline. Automated monthly debits from your bank account alleviate investor concerns, ensuring a systematic and stress-free approach. This feature makes India’s best SIP plan for investment an ideal choice for those seeking consistency in their financial planning.

4. Power of Compounding

According to the concept of compound interest, even small investments over a long period can yield substantial returns. This is why the best SIP for long term investments is so effective in building a significant corpus. The power of compounding is key for those considering the best funds for SIP or the best mutual funds next 10 years.

5. Minimal Initial Investment

Different types of SIPs empower investors to start with as little as Rs. 100 per month. This makes top SIP plans accessible to all kinds of investors, including those looking for the best mutual fund to invest now or the best SIP plan for 3 years.

How to Choose the Best SIP to Invest in?

Now that you understand the benefits of a SIP and the risks, it’s time to choose the right mutual fund for your portfolio. With more than 5,500 mutual fund schemes available in India, choosing the right mutual fund for your systematic investment plan can be challenging. However, here is a list of key factors that you can consider while investing in the best performing mutual funds:

• Investment Objective: Determine your investment goal, whether short-term (e.g., buying a car) or long-term (e.g., children’s education or retirement). Align your investment with your risk tolerance.
• Fund House Knowledge: While searching for which mutual fund is best for investment, thoroughly research the fund house responsible for managing your money. Evaluate the number of schemes they offer, their investment approach, and the availability of innovative products.
• Performance Analysis: Assess the fund’s historical returns over various periods and compare them with benchmark indices. Perform a web search for this information.
• Expense Ratios and Loads: Even small costs like expense ratios and loads can significantly impact long-term returns. Choose SIP schemes investment plans with lower or no load prices and minimal expense ratios. Find this information in scheme documents or fund fact sheets.
• Fund Manager’s Experience: Investigate the fund manager’s track record, especially during market downturns. A seasoned fund manager with expertise across investment categories is crucial for efficient portfolio management and higher returns.

What are the Returns on the Best SIP to Invest in & How are they Calculated?

Calculating returns on the best mutual fund for SIP involves a straightforward yet insightful methodology. The most common metric is the Compound Annual Growth Rate (CAGR), which accounts for the compounding effect over time, considering the SIP tenure. It considers the initial investment, subsequent inflows through the best SIP funds, and the final value of the investment.

To calculate CAGR, use the formula:

CAGR = (Ending balance/beginning balance)^1/n – 1

Another crucial indicator of the best performing mutual funds is the Total Return, factoring in capital gains, dividends, and interest. This comprehensive measure offers a holistic view of the fund’s performance.

Investors should also analyse the Rolling Returns, providing insights into a fund’s consistency across various holding periods. It aids in assessing performance under different market conditions.

Understanding these metrics equips investors with a transparent view of how returns on the best SIP to invest are derived, fostering informed decision-making in the dynamic landscape of mutual fund investments.

Taxation on Mutual Funds for SIP as per Union Budget 2024-25

The taxation on capital gains from your mutual fund investments is based on their holding periods and asset allocation. A few revisions were made to the tax rates, depending on their types, in the Union Budget 2024-25. In order to select the best mutual funds for SIP, it is important to learn about these revisions as well. They include:

Equity Mutual Funds

• Short-Term Capital Gains (STCG): The gains from equity mutual funds held for less than 12 months are now taxed at 20%. This is an increase from the previous tax rate of 15%.
• Long-Term Capital Gains (LTCG): For equity mutual funds held for over a period of over 12 months, gains are classified as long-term capital gains. The tax-free limit for long term capital gains has increased to Rs. 1.25 lakh per year, up from Rs. 1 lakh. Gains above this limit are now taxed at 12.5%, an increase from the previous 10%. 

Additionally, the indexation benefit, which adjusted purchase prices for inflation to reduce taxable gains, has been removed for all asset classes. Now, long-term capital gains are taxed at a flat 12.5% without indexation.

Capital Gains Tax	Holding Period	Old Rate	New Rate
Short-Term Capital Gains (STCG)	Less than 12 months	15%	20%
Long-Term Capital Gains (LTCG)	More than 12 months	10%	12.50%

Debt Mutual Funds

• Short-Term Capital Gains (STCG): If you sell your debt fund units within a period of 36 months, the gains are classified as short-term capital gains. The STCG will be taxed according to your income tax slab rate.
• Long-Term Capital Gains (LTCG): For debt funds held for a period over 36 months, the gains are classified as long-term capital gains. A flat 12.5% tax now applies to capital gains, with the indexation benefit removed, meaning the entire gain after three years is taxable. For specified mutual funds with over 65% in debt, the holding period for long-term capital gains has been reduced from 36 to 24 months, but these gains will still be taxed according to the investor’s tax slab.

Capital Gains Tax	Holding Period	Old Rate	New Rate
Short-Term Capital Gains (STCG)	Less than 36 months	Taxed according to your income tax slab	Taxed according to your income tax slab
Long-Term Capital Gains (LTCG)	More than 36 months	10%	12.50%

Hybrid Mutual Funds

Short-Term Capital Gains (STCG)

The tax on short-term capital gains depends on the fund’s asset allocation when it comes to hybrid mutual funds.

• Equity-Oriented Hybrid Funds (more than 65% in equity): The gains from units sold within 12 months are taxed at 20%.
• Debt-Oriented Hybrid Funds (less than 65% in equity): The gains from units sold within three years are taxed according to your income tax slab.

Long-Term Capital Gains (LTCG)

The capital gains tax on hybrid mutual funds that extend the specified period (12 or 36 months) is known as the long-term capital gain tax. 

• Equity-Oriented Hybrid Funds: The gains from units held for over a period of 12 months are taxed at 12.5%. The gains up to Rs. 1.25 lakh are tax-free.
• Debt-Oriented Hybrid Funds: The gains from units held for over a period of 36 months are taxed at 12.5% without indexation benefits. This means the entire gain is taxed at this rate, without adjustment for inflation.

Type of Hybrid  Fund	Short-Term Capital Gains (STCG)	Long-Term Capital Gains (LTCG)	Indexation Benefit
Equity-Oriented Hybrid Funds	20% for holdings less than 1 year	12.5% for holdings over 1 year, with gains up to Rs. 1.25 lakh tax-free	Not available
Debt-Oriented Hybrid Funds	Taxed as per income tax slab for holdings less than 3 years	12.5% for holdings over 3 years	Not available

Note: Mutual fund schemes where neither the equity nor debt orientation exceeds 65% will now be classified as long-term investments after 24 months. The previous holding period for these funds was 36 months. These will be taxed at the revised LTCG tax rate of 12.5%.

To Wrap It Up…

Now that you know what is a SIP and how does it works, you’re ready to explore the top mutual funds for SIPs to invest in 2024. Starting a SIP online is as simple as logging into a mutual fund platform, selecting a fund, and setting your investment amount and frequency. Choosing the right mutual fund for your SIP investment among over 5,500 available in India may seem daunting, but it’s crucial for financial success. Explore the SIP plans listed and use the smallcase SIP calculator to analyse returns. Don’t forget to assess factors like fund house reputation, historical returns, NAV, and risk before making a decision. Explore some of the best SIP plans to invest in on our website for a comprehensive view.

Frequently Asked Questions (FAQs) on the Best SIP to Invest

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