Top Mutual Funds for SIP to Invest in Online (2024)

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	Plan	AUM (in Cr.)	CAGR 3Y (%)	Expense Ratio (%)
Bank of India Credit Risk Fund	Credit Risk Fund	Growth	114.54	39.67	1.18
Motilal Oswal Midcap Fund	Mid Cap Fund	Growth	15940.06	36.93	0.6
SBI PSU Fund	Thematic Fund	Growth	4703.46	36.92	0.72
Aditya Birla SL PSU Equity Fund	Thematic Fund	Growth	5945.60	36.81	0.49
ICICI Pru Bharat 22 FOF	FoFs (Domestic) - Equity Oriented	Growth	2040.16	35.47	0.12
Invesco India PSU Equity Fund	Thematic Fund	Growth	1593.41	34.61	0.76
ICICI Pru Infrastructure Fund	Sectoral Fund - Infrastructure	Growth	6142.92	34.38	1.24
LIC MF Infra Fund	Sectoral Fund - Infrastructure	Growth	750.04	34.23	1.38
DSP India T.I.G.E.R Fund	Sectoral Fund - Infrastructure	Growth	5500.38	34.04	0.89
HDFC Infrastructure Fund	Sectoral Fund - Infrastructure	Growth	2567.79	33.55	1.11

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data on the list of the best mutual funds for SIP is from 10th October 2024 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 2024: An Overview

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

Bank of India Credit Risk Fund

Managed by Bank of India Investment Managers, this credit risk fund seeks to generate returns by investing primarily in lower-rated but higher-yielding corporate bonds. As a subsidiary of Bank of India, which has a rich legacy since 1906, the AMC has over 14 years of experience in managing investments. With AUM of ₹114 Cr, the fund caters to investors looking for higher yields through exposure to credit risk. It has an expense ratio of 1.18% and a yield to maturity (YTM) of 7.06%, indicating its focus on maximising returns through credit risk management while maintaining a balance between risk and reward.

Motilal Oswal Midcap Fund

This mid-cap fund, managed by Motilal Oswal Asset Management, is designed for investors who want to tap into India’s growing mid-cap companies, which offer high growth potential. The fund is promoted by Motilal Oswal Financial Services, one of India’s prominent financial services companies, and focuses on identifying high-growth companies that are still in the mid-cap phase of development. With AUM of ₹15,940 Cr, the fund combines a diversified portfolio with a robust expense ratio of 0.60%. Its PE ratio of 83.70% suggests an emphasis on growth stocks that may be trading at premium valuations due to their future earnings potential.

SBI PSU Fund

The SBI PSU Fund is managed by SBI Funds Management, a joint venture between State Bank of India and AMUNDI, a global asset manager. This fund targets public sector undertakings (PSUs) in India, providing investors with an opportunity to benefit from India’s governmental infrastructure and industrial growth. With AUM of ₹4,703 Cr, the fund is ideal for investors who want exposure to large government-backed companies. Its expense ratio of 0.72% ensures cost-effective management, and a PE ratio of 18.85% suggests that the fund focuses on more reasonably priced PSU stocks with strong growth potential.

Aditya Birla SL PSU Equity Fund

A joint venture between the Aditya Birla Group and Sun Life Financial, this fund offers investors exposure to PSU equities. The Aditya Birla SL PSU Equity Fund capitalises on the robust performance of India’s public sector entities, which are critical to the country’s economic backbone. With AUM of ₹5,945 Cr, this fund appeals to investors looking for steady, government-supported companies that provide long-term growth potential. The fund maintains a low expense ratio of 0.49%, and its PE ratio of 16.39% reflects its focus on fundamentally strong, attractively valued PSUs.

ICICI Pru Bharat 22 FOF

This fund, managed by ICICI Prudential Asset Management, gives investors access to the Bharat 22 Index, which includes a mix of public sector companies and private entities. With AUM of ₹2,040 Cr, it allows investors to diversify their portfolios across different sectors of the economy, including finance, energy, and infrastructure. The expense ratio of 0.12% makes this fund a highly cost-effective option, appealing to those looking for broad-based exposure to Indian public and private companies with minimal fees.

Invesco India PSU Equity Fund

Invesco India PSU Equity Fund offers investors exposure to public sector enterprises (PSUs) in India, managed by the global investment giant Invesco. With a presence in over 25 countries and a workforce of 8,000 globally, the company brings international expertise to the Indian market. With AUM of ₹1,593 Cr and an expense ratio of 0.76%, this fund is ideal for investors who want to invest in PSUs with the added benefit of global fund management expertise.

ICICI Pru Infrastructure Fund

This infrastructure-focused fund is managed by ICICI Prudential AMC, India’s leading asset manager. The ICICI Pru Infrastructure Fund invests in companies contributing to India’s infrastructure development, a key growth driver for the country’s economy. With AUM of ₹6,142 Cr, the fund provides exposure to high-growth sectors such as energy, construction, and utilities. Its expense ratio of 1.24% ensures active management, while a PE ratio of 33.05% reflects the focus on growth-oriented infrastructure companies.

LIC MF Infra Fund

Managed by LIC Mutual Fund, this fund focuses on infrastructure development in India, targeting sectors such as power, telecommunications, and transportation. LIC Mutual Fund, backed by Life Insurance Corporation of India, has been a trusted name in the Indian financial market since 1989. The fund has AUM exceeding ₹14 Cr and an expense ratio of 1.38%, making it a solid choice for investors seeking long-term exposure to infrastructure growth. Its PE ratio of 51.68% suggests that it focuses on infrastructure companies with high growth potential, though they may be trading at higher valuations.

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

The DSP India T.I.G.E.R (The Infrastructure Growth and Economic Reforms) Fund, managed by DSP Investment Managers, focuses on sectors benefiting from India’s infrastructure growth and economic reforms. DSP, one of the oldest financial institutions in India, has been managing funds for over 150 years. The fund has AUM of ₹5,500 Cr and an expense ratio of 0.89%, providing a balance between cost and active management. With a PE ratio of 47.76%, the fund invests in companies expected to benefit significantly from government initiatives and economic reforms.

HDFC Infrastructure Fund

Managed by HDFC Asset Management, one of India’s leading fund houses, this fund offers investors exposure to infrastructure companies involved in the construction, development, and modernisation of India’s infrastructure. With AUM of ₹2,567 Cr, the HDFC Infrastructure Fund aims to capitalise on the vast potential of India’s infrastructure sector. Its expense ratio of 1.11% reflects the cost of managing a focused portfolio, while the PE ratio of 32.53% indicates an emphasis on growth companies within this sector.

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:

• Align with Your Needs: Tailor your SIP investments to meet your financial goals. By starting a small monthly amount, you can ease the financial burden compared to a lump sum investment. Utilise online resources to explore top mutual funds in 2024.
• Diversify SIPs for Specific Goals: Establish monthly SIP plans for each goal to gain a comprehensive view of your investment schemes. Identify the right investment strategy for each objective, considering the best mutual fund that is aligned with your timeframe. Use a SIP Calculator to project potentially highest return mutual funds based on monthly investment, expected return rate, and the investment period.
• Match Investments with Risk Tolerance: Your risk appetite, determined by factors like discretionary income and investment horizon, plays a pivotal role. Tailor your investments in specific asset classes to align with your unique risk tolerance.
• Regularly Assess Portfolio Performance: It is important to review your SIP mutual fund portfolio every three to four years to check the best performing mutual funds. This routine evaluation helps you eliminate underperforming assets and boosts overall portfolio returns.

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 2024:

• Market Fluctuations: The performance of the different types of SIPs is inherently linked to market movements. While historical data may indicate resilience, it’s essential to acknowledge the unpredictability of financial markets. Changes in economic conditions, global events, and interest rate fluctuations can impact the returns of even the best SIPs.
• Liquidity Risk: Despite being designed for liquidity, unexpected circumstances can affect the redemption process of the best mutual funds SIP. While the best MF scheme for SIP instalment typically provides a mechanism for easy exit, extreme market conditions or specific fund-related issues can impact the ease of liquidating investment schemes.
• NAV Volatility: Net Asset Value (NAV) represents the per-unit market value of a mutual fund on a specific date. NAV fluctuations are inherent in mutual fund SIP investments and can affect overall returns. It’s crucial for investors to comprehend how market-related risks can influence the NAV of the SIPs they are considering.
• Fund-specific Risks: Mostly, every investment carries a certain degree of risk, so does a good mutual fund for SIP. These may include concentration risks, such as overexposure to a particular sector, or risks associated with changes in fund management. Understanding these specific risks requires a thorough reading of the fund’s offer document.

Benefits of Investing in the Best SIP

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

• SIP Top-Up: Instead of applying for a new SIP each year, you can opt for the SIP top-up option. You can easily set a percentage or amount increase in your investment scheme annually, contributing to faster goal achievement and effective inflation-beating.
• Market Timing Irrelevant: The best SIP for 1 year or more eliminates the need to time the market, whether bullish or bearish. The investment’s immunity to market volatility arises from spreading it across multiple years. This, in turn, averages out the investment cost per unit, leading to enhanced returns.
• Financial Discipline: True to its name, when you invest in SIP, it fosters financial discipline. Automated monthly debits from the bank account alleviate investor concerns, ensuring a systematic and worry-free investment approach.
• Power of Compounding: According to the concept of compound interest, even if you invest a small amount of money over a long period, the investment can grow significantly, yielding substantial returns. Thus, investing in a SIP can help you build a substantial fund. 
• Minimal Initial Investment: Different types of SIPs empower investors to start SIP with as little as Rs. 100 per month, making it accessible to all investors.

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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