Invest in the Top-rated SBI Mutual Funds SIP for Long Term in India (2024)

Did you know that SBI Mutual Fund is one of India’s largest and oldest mutual fund houses? It was established in 1987 as a joint venture between State Bank of India (SBI) and Amundi Asset Management. This AMFI-registered mutual fund distributor offers a wide range of mutual fund schemes across equity, debt, hybrid, and other categories. 

Among the many investment options available, SBI Mutual Fund’s Systematic Investment Plans (SIPs) have gained popularity for their ability to help investors achieve their long-term financial goals. With consistent performance, investing in SBI Mutual Fund’s SIP plans have proved to be a sound investment decision for many investors.

In this blog, we will delve into the best SBI mutual fund for SIP in the long term and learn its features, benefits, and how you can invest in them.

Best SBI Mutual Fund for SIP Long Term in India Based on 5Y CAGR

Name	Sub Category	Plan	AUM	Expense Ratio	CAGR 3Y	CAGR 5Y	Minimum SIP	Exit Load
SBI Contra Fund	Contra Fund	Growth	34,366.42	0.63	30.54	30.45	500	1
SBI Infrastructure Fund	Sectoral Fund - Infrastructure	Growth	3,851.32	1.34	34.81	28.56	1,000	0.5
SBI Focused Equity Fund	Focused Fund	Growth	33,488.94	0.74	16.87	19.41	500	1
SBI BlueChip Fund	Large Cap Fund	Growth	49,176.63	0.83	17.97	18.39	5,000	1
SBI ESG Exclusionary Strategy Fund	Thematic Fund	Growth	5,874.15	1.31	18.04	18.39	1,500	1
SBI Nifty Index Fund	Index Fund	Growth	7,431.36	0.2	16.71	16.93	500	0.2
SBI Equity Hybrid Fund	Aggressive Hybrid Fund	Growth	68,372.47	0.74	14.87	15.96	5,000	1
SBI Magnum Children's Benefit Fund-Savings Plan	Solution Oriented - Children's Fund	Growth	110.77	0.86	12.87	13.05	500	3
SBI Magnum Income Fund	Medium to Long Duration Fund	Growth	1,769.05	0.79	6.19	7.68	5,000	1
SBI Nifty Next 50 Index Fund	Index Fund	Growth	1,073.18	0.33	24.24	0	0	0.5

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 list of top-performing SBI SIP investment plans is derived from Tickertape Mutual Fund Screener and the data is derived from 9th July 2024. The parameters used to curate the list are as follows:

• Plan > Growth 
• Expense Ratio 
• CAGR 3Y
• CAGR 5Y: Sort from high to low
• Minimum SIP Investment
• Exit Load

Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.

Overview of the Top 10 SBI Mutual Fund for SIP Long Term

SBI Contra Fund

SBI was the first Indian mutual fund house to introduce a ‘Contra fund’, known as the SBI Contra Fund. Launched on 9th May 2005, it is an open-ended SBI equity mutual fund designed for investors aiming for long-term capital growth. The fund is led by Dinesh Balachandran and has an AUM of Rs. 34,366.42 cr. as of 9th July 2024. With an expense ratio of 0.63%, the fund has delivered exceptional returns. The 3Y CAGR and 5Y CAGR of the fund is 30.54% and 30.45%. The minimum investment amount for this fund is Rs. 500. It is also one of the SBI best investment plans for monthly income on our list!

SBI Infrastructure Fund

SBI Infrastructure Fund, launched on 6th July 2007, is an equity mutual fund scheme launched by SBI Mutual Fund. As of 9th July 2024, the AUM of the fund is Rs. 3,851.32 cr. and has an expense ratio of 1.34%. It invests a minimum of 80% in companies related to the infrastructure sector. With a 5Y CAGR of 28.56%, the fund carries a moderate risk level and the exit load of the fund is 0.5% 

SBI Focused Equity Fund

The SBI-Focused Equity Fund primarily targets startup business themes with a focus on outsourcing, export, and global opportunities. This fund option was launched on 11th October 2004. As of 9th July 2024, the AUM of the fund is Rs. 33,488.94 cr. and has an expense ratio of 0.74%. The fund has delivered a 3Y CAGR of 16.87% and a 5Y CAGR of 19.41%, showcasing moderate growth. Moreover, the fund imposes a 1% exit load. You can start investing in the SBI Focused Equity Fund with a minimum of Rs. 500. 

SBI Blue Chip Fund

The SBI Blue Chip Fund is an open-ended SBI equity fund aiming for long-term capital growth through strategic investments in large-cap stocks. The fund was launched on 14th February 2006. As of 9th July, the fund’s AUM is Rs. 49,176.63 cr. The fund has an expense ratio of 0.84%, close to what most large-cap funds charge. The fund has been able to generate better returns compared to other funds in the same category. You can start investing in this fund at just Rs. 5,000.

SBI ESG Exclusionary Strategy Fund

This open-ended equity mutual scheme launched on 1st January 2013. As of 9th July 2024, the AUM of the fund is Rs. 5,874.15 cr. with an expense ratio of 1.31%. The fund has delivered an impressive 3Y CAGR of 18.04% and 5Y CAGR of 8.39%. The exit load is 1%. The minimum SIP amount for this fund is Rs. 1,500.

SBI Nifty Index Fund

SBI Nifty Index Fund is another mutual fund scheme. This scheme was made available to investors on 17th January 2024. As of 9th July 2024, the AUM of the fund is Rs. 7,431.36 cr. and with an expense ratio of 0.2%. The fund has delivered 3Y CAGR of 16.71% and 5Y CAGR of 16.93%. The exit load is 0.2%. The minimum SIP amount for this fund is Rs. 500.

SBI Equity Hybrid Fund

SBI Equity Hybrid Fund is an aggressive hybrid mutual fund scheme offered by SBI Mutual Fund. It is designed for capital growth through a balanced mix of debt and equity securities. The fund was launched on 31st December 1995. As of 9th July 2024, the AUM of the fund is Rs. 68,372.47 cr. and has an expense ratio of 0.74%. The fund has delivered positive growth in terms of 3Y CAGR and 5Y CAGR, i.e., 14.87% and 15.96%. The minimum SIP investment is just Rs. 5,000. 

SBI Magnum Children’s Benefit Fund

The SBI Magnum Children’s Benefit Fund – Savings Plan is a mutual fund scheme tailored for investors saving for a child’s future needs. This plan invests in a combination of debt and equity instruments. The fund was launched on 1st January 2013. As of 9th July 2024, the AUM of the fund is Rs. 110.77 cr and has an expense ratio of 0.86%. The fund has shown a positive trend by delivering a 3Y CAGR of 12.87% and a 5Y CAGR of 13.05%. It imposes a 3% exit load. The minimum SIP investment is just Rs. 500.

SBI Magnum Income Fund

The SBI Magnum Income Fund is a medium to long-duration debt mutual fund scheme offered by SBI Mutual Fund. It aims to provide investors with regular income by investing in debt and money market instruments. The fund has an AUM of Rs. 1,769.05 cr. and an expense ratio of 0.9%, while imposing an exit load of 1%. The 3Y CAGR is 6.19% and 5Y CAGR is 7.68%.  The minimum SIP investment is just Rs. 5,000.

SBI Nifty Next 50 Fund

The SBI Nifty Next 50 Fund is an open-ended large-cap equity scheme designed to closely track the total return of equity securities in the underlying index. It was launched on 19th May 2021. This fund primarily invests in equities and related instruments and has an AUM of Rs. 1,073.18cr. as of 9th July 2024. The 3Y CAGR is 24.24% and has an expense ratio of 0.33%. 

How to Invest in SIP in SBI Mutual Funds?

You can easily invest in SBI mutual funds by following these steps:

• Visit a mutual fund platform and log in using your existing demat account. If you don’t have a demat account, you can open a demat account on smallcase from here.

• The next step is to identify SBI SIP investment schemes that align with your investment thesis.

• Once you’ve compiled a list of the best SIP plans offered by SBI Bank, go to the ‘Mutual Funds’ section. Since we’re opting for the SIP investing approach, simply select your preferred frequency investment date (daily, weekly, monthly or annually), input the amount you want to contribute, and choose your payment method. The platform will then automatically debit the specified amount from your account on the chosen date each month and invest it in the mutual funds you’ve selected. 

It’s important to do your due diligence when selecting SBI mutual funds for SIP. Research the funds thoroughly, looking at factors like past performance, risk profile, and fees. This will help you make an informed investment decision that aligns with your financial goals and risk tolerance. As always, consult a financial advisor before making an investing decision. 

What is SBI Mutual Fund for SIP Long Term?

SBI Mutual Fund is operated by India’s largest public sector bank, the State Bank of India. It is a leading fund house specialising in various mutual fund investment services, including equity, hybrid, and SBI debt funds. 

A widely embraced method for investing in SBI mutual fund schemes is through a systematic investment plan, commonly referred to as SIP. This approach empowers investors, irrespective of the size of their savings, to build a substantial savings corpus for the future. SIP offers a convenient pathway to financial growth by consistently investing small amounts at regular intervals.

How Do Best SBI Mutual Fund for SIP Long Term Work?

Systematic Investment Plan (SIP) is a facility offered to investors to invest in mutual funds in a disciplined manner. This facility allows the investors to invest a fixed amount in the selected mutual fund schemes at a predetermined date.  With SBI SIP schemes, investors can authorise automatic debits from their chosen monthly, weekly, or daily investment amount from the registered bank account on a specific date.

This invested amount is then allocated to a selected SBI Mutual Fund scheme. While your individual investment remains constant, keep in mind that the scheme’s Net Asset Value (NAV) fluctuates daily, affecting the number of units acquired in each SIP instalment.

For example, if you invest Rs. 1000 monthly and the initial NAV is Rs. 100, you buy 10 units. If the NAV rises to Rs. 60 for the next instalment, you can only purchase 6.67 units. Conversely, if the NAV drops to Rs. 40, you could acquire 15 units. This variation in unit prices during SIP investments is termed “rupee cost averaging,” which proves advantageous in the long run.

Benefits of Investing in the Best SIP Plans from SBI Mutual Fund

Here is a list of benefits offered by the best SIP of SBI mutual fund: 

• Disciplined Investing: A disciplined approach is key to achieving your financial goals. SBI Mutual Fund’s Systematic Investment Plans (SIPs) offer a structured way to invest, with a fixed amount automatically debited from your account at regular intervals and invested in your selected mutual fund scheme. This approach helps balance market risk by investing a fixed sum regardless of market conditions.
• Rupee Cost Averaging: Rupee Cost Averaging is a key benefit of investing in SBI SIP plans. By investing a fixed amount at regular intervals, RCA allows you to automatically buy more units when prices are low and fewer units when prices are high, ultimately lowering your average cost per unit over time.
• Flexible Investment Tenure: SIPs offer flexible investment tenures by allowing investors to choose how often and how much they want to invest. For instance, you can start investing in the SBI Nifty Index Fund at just Rs. 500. However, you can also increase the amount using the SIP top-up option instead of starting a new SIP plan of the best mutual fund of SBI. 
• Power of Compounding: When it comes to investing in mutual funds through SBI SIPs, the earlier you start, the better. Even small amounts invested via SIP in SBI bank’s mutual fund schemes can significantly impact the returns due to the power of compounding. Therefore, you can calculate your returns using smallcase’s SBI SIP Calculator, which uses a compounding system to estimate returns over the selected period. 

How to Choose the Best SBI Mutual Fund for SIP Long Term for Investing?

If you are wondering how to redeem SBI mutual funds, the key is to choose the right ones. Selecting the optimal SBI Mutual Fund for SIP long-term investing involves a strategic evaluation of these key parameters:

• Define Your Investment Goals: Clearly articulate your financial aspirations and objectives before delving into SBI Mutual Fund options.
• Align with Long-Term Vision: Ensure your chosen fund aligns with a long-term investment strategy, complementing the inherent nature of systematic investment plans.
• Explore Diverse SBI Mutual Fund Options: Investigate a range of SBI Mutual Funds, considering performance history, managerial expertise, and overall SBI mutual fund investment philosophy.
• Mindful Evaluation of Costs: Assess the fund’s cost structure, keeping an eye on expense ratios and associated fees to optimize SBI mutual funds returns over time.
• Seek Consistency Across Market Conditions: Evaluate the fund’s track record for consistency in generating returns, considering various market scenarios.
• Gain Insights into Assets and Sectors: Understand the underlying assets and sectors the fund invests in, ensuring they align seamlessly with your overall investment approach.
• Ensure Balanced Portfolio Composition: Verify that the fund’s portfolio composition offers a balanced approach that matches your risk preferences.

Who Should Invest in the Best SIP Plans in SBI Bank?

Identifying the ideal investors for the best SBI mutual fund for SIP long term involves understanding specific financial objectives and risk preferences. Individuals with a long-term investment horizon seeking potential capital appreciation while navigating market fluctuations may find this fund suitable. It aligns with those prioritising disciplined and gradual wealth accumulation through systematic investment plans (SIPs).

Investors looking for a diversified portfolio across various market segments managed by experienced professionals may also consider this SBI Mutual Fund. It caters to those comfortable with market volatility, as long-term SIPs aim to harness the power of compounding over time.

While it’s crucial for investors to conduct thorough research and possibly consult with financial advisors, this mutual fund’s characteristics may appeal to those who appreciate a strategic, long-term approach to wealth building. Understanding your financial goals and risk tolerance is key to determining if the best SBI Mutual Fund for SIP Long Term aligns with your investment objectives.

Potential Risks of Investing in SBI Mutual Fund for SIP Plans

SBI Mutual Fund takes a proactive approach to risk management, employing various techniques to mitigate the impact on investors’ portfolios and ensure consistent returns. It also has a Risk Management division within the organisation to mitigate the various risks in the market. Thus, under the guidance of a professional, skilled, and dedicated management team, SBI adopts a comprehensive approach that focuses on achieving its enterprise-specific goals. 

For risk control and management, the following must be noted: 

• Liquidity Risk: Liquidity refers to how easily an investment can be converted into cash. The liquidity of a mutual fund scheme depends on factors like trading volumes, transfer procedures, and settlement periods. If these factors limit liquidity, it can pose a risk to investors.
• Interest Rate Risk: It is a significant factor in bond prices. When interest rates rise, bond prices fall, and vice versa. This means that if interest rates increase, the value of your bonds decreases. However, a well-diversified portfolio can help reduce this risk by spreading your investments across different types of bonds and assets.
• Market Volatility: When investing in mutual funds, it’s important to understand that market volatility can occur due to various external factors such as liquidity flows, changes in the business environment, and economic policy shifts. However, SBI Mutual Fund schemes are designed to manage this volatility risk through diversification.

Taxation on SBI Mutual Funds for SIP Long-Term as per the 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 SBI mutual funds for SIP long-term, 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 new budget introduces these key changes to the LTCG:

1. Tax-Free Limit: The capital gains up to Rs. 1.25 lakh per year are tax-free. This is an increase from the previous limit of Rs. 1 lakh.
2. Tax Rate: The gains exceeding Rs. 1.25 lakh are now taxed at a flat rate of 12.5%. This is an increase from the previous rate of 10%.
3. Indexation: The benefit of indexation, which allowed investors to adjust the purchase price for inflation, has been removed for all asset classes, including equity mutual funds.

Indexation was a method that allowed investors to adjust the purchase price of assets for inflation. This adjustment reduced taxable profits when selling assets like property or gold. Previously, these long-term capital gains were taxed at 20%. The new rule imposes a flat 12.5% tax on all long-term capital gains but eliminates any indexation benefits.

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. The new budget outlines a few changes on the LTCG for debt funds, including:

1. Tax Rate: A flat 12.5% tax rate applies to these gains.
2. No Indexation Benefit: The previous benefit of adjusting the purchase price for inflation is removed. Now, the entire gain after three years is taxable at 12.5%.

• Change in Holding Period for Specified Mutual Funds: Previously, debt mutual funds with a holding period of over 36 months were taxed based on the investor’s tax slab, classified as Long-Term Capital Gains (LTCG). Now, for specified mutual funds where over 65% of the investment is in debt, the holding period for taxation has been reduced to over 24 months. These funds will still be taxed according to the investor’s tax slab as either LTCG or STCG. 

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. Here is a breakdown of STCG tax rates according to their asset allocation in hybrid 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. The tax treatment under this condition is as follows:

• 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%.

Factors to Consider Before Investing in the Best SBI Mutual Funds for SIP Long-Term 

Consider these essential factors before committing to long-term SIP investments in the best SBI mutual funds:

• Identify Investment Goals: Before starting a SIP, start by identifying your investment objective. A financial goal could be anything, such as a wedding, a child’s education, building a retirement corpus, or having an emergency fund for urgent requirements. 
• Know Your Risk Appetite: Next, you must determine your risk tolerance before investing. Mutual fund schemes can be categorised as low, medium, or high risk, depending on the type of securities and asset classes they invest in. By aligning your SBI bank mutual fund schemes with your risk profile, you can better manage your expectations and be prepared to bear market volatility.
• Time Horizon: Financial goals and investment tenure mostly go hand-in-hand. Choosing SBI MF schemes that align with your short-term, medium-term, or long-term financial goals can help you manage risk, set realistic expectations, and maximise the potential of your investments to achieve your objectives.
• Expense Ratio: When investing in mutual funds, it’s important to consider the expense ratio – the annual fee charged by the fund house to manage your investments. While mutual funds provide the expertise of professional fund managers who research, analyse, and make timely investments based on market conditions, investors generally prefer schemes with a lower expense ratio. Therefore, it is advisable to research mutual fund schemes and compare their expense ratios before investing. 
• Exit Load: Aside from the expense ratio, it’s also crucial to consider any exit loads associated with SBI Mutual Fund schemes. Exit loads are fees charged if you withdraw your investment before a certain time period. Funds with no exit or lower exit loads are generally preferable, as they provide greater flexibility and allow you to access your money without incurring additional costs.

To Wrap It Up…

The best SBI mutual fund for SIP in the long term can be an efficient and disciplined approach to investing. You can choose the best SIP schemes from SBI mutual fund investment based on your goals, risk profile, and investment horizon. Therefore, with flexibility and expert management, you can take this informed approach to build a resilient portfolio tailored to your needs. However, consult a financial advisor to get a better understanding of your investing approach. 

Most Popular Mutual Funds:

As an investor to have a diversified mutual funds portfolio, you might also like to know more about these different types of funds for investing –

Large Cap Mutual Funds	Mutual Fund Bulk Deals	SBI Mutual Funds for SIP	SBI MF for Long Term SIP	Sectoral Mutual Funds	Short Term Mutual Funds	Tax Saving Mutual Funds	Mid Cap Mutual Funds
Small Cap Mutual Funds	Pharma Mutual Funds	80c Mutual Funds	1 Year Mutual Funds	International Mutual Funds	Tata Mutual Funds	Mutual Fund Portfolio	Best Mutual Funds
High Risk Mutual Funds	Micro Cap Mutual Funds	AMCs	MNC Mutual Funds	Equity Mutual Funds	Overnight Funds	ICICI Pru Mutual Funds	HDFC Mutual Funds
Best Investment Plans	Fixed Income Mutual Funds	Penny Stock Mutual Funds	Retirement Mutual Funds	Floater Rate Funds	Aggressive Hybrid Funds	Multi Asset Allocation Funds	Children’s Funds
Medium Duration Funds	Debt Funds	Corporate Bonds	Ultra Short Term Funds	Value Funds	Contra Funds	Focused Funds	Funds of Funds
Money Market Funds	Arbitrage Funds	Gold Mutual Funds	Books on Mutual Funds	Best Mutual Funds for SIP	SBI Mutual Funds	Low Risk Mutual Funds	Dividend Paying Funds
Long Term Mutual Funds	Banking Mutual Funds	Gilt Funds	Mutual Funds for 10 Years	Monthly Income Mutual Funds	Nifty 50 Index Funds	Lumpsum Investment Funds	Blue Chip Mutual Funds
Low Expense Ratio Funds

Frequently Asked Questions on Best SBI Mutual Fund for SIP Long Term