Last Updated on Jul 30, 2024 by Anjali Chourasiya
Systematic Investment Plan (SIP) mutual fund investments are known to provide greater control over your investments for the long term and inculcate financial discipline in the investor. Mutual funds for SIP are generally considered a good option for getting exposure to equity investments. As of October 2023, Indian Mutual Funds reported about 7.30 crore (73 million) SIP accounts, with a total amount collected through SIP during that month being ₹16,928 crore. This highlights the growing popularity and acceptance of SIPs as a preferred investment method among Indian investors. With this in consideration, let’s look at the best SIP mutual funds for large-cap, mid-cap, small-cap, and flexi-cap mutual funds, along with features, benefits and more for the best SIP to invest in.
Table of Contents
Best Large-Cap SIP Mutual Funds
| Name | AUM (Rs. in cr.) | CAGR 3Y (%) | Expense Ratio (%) | Exit Load (%) | Minimum SIP (Rs.) |
| Nippon India Large Cap Fund | 20,217.64 | 23.49 | 0.82 | 1.00 | 100.00 |
| ICICI Pru Bluechip Fund | 47,928.62 | 20.72 | 0.92 | 1.00 | 500.00 |
| JM Large Cap Fund | 73.80 | 20.69 | 1.75 | 1.00 | 100.00 |
| HDFC Top 100 Fund | 30,261.72 | 20.15 | 1.08 | 1.00 | 1500.00 |
| Baroda BNP Paribas Large Cap Fund | 1,743.14 | 18.78 | 0.92 | 1.00 | 1500.00 |
| Edelweiss Large Cap Fund | 685.68 | 18.41 | 0.80 | 1.00 | 100.00 |
| Tata Large Cap Fund | 1,888.01 | 17.89 | 1.15 | 1.00 | 150.00 |
| Mahindra Manulife Large Cap Fund | 327.38 | 17.06 | 0.73 | 1.00 | 1500.00 |
| Kotak Bluechip Fund | 7,333.93 | 16.98 | 0.59 | 1.00 | 100.00 |
| Taurus Large Cap Fund | 41.84 | 16.79 | 2.55 | 1.00 | 1500.00 |
Note: The data is as of 29th February 2024. It is based on the following parameter applied on the Tickertape Mutual Fund Screener:
- Category > Equity > Large-cap Fund
- Plan: Growth
- 3-yr CAGR – Sorted from highest to lowest
- Exit load
- Minimum SIP
Best Mid-Cap SIP Mutual Funds
| Name | AUM (Rs. in cr.) | CAGR 3Y (%) | Expense Ratio (%) | Exit Load (%) | Minimum SIP (Rs.) |
| HDFC Mid-Cap Opportunities Fund | 56,032.99 | 29.59 | 0.78 | 1.00 | 100.00 |
| Axis Midcap Fund | 24,563.59 | 19.70 | 0.52 | 1.00 | 100.00 |
| DSP Midcap Fund | 16,790.00 | 16.91 | 0.74 | 1.00 | 100.00 |
| SBI Magnum Midcap Fund | 15,457.95 | 24.38 | 0.84 | 1.00 | 1500.00 |
| Mirae Asset Midcap Fund | 14,361.60 | 25.29 | 0.57 | 1.00 | 500.00 |
| Franklin India Prima Fund | 10,081.36 | 20.57 | 1.04 | 1.00 | 500.00 |
| PGIM India Midcap Opp Fund | 9,962.07 | 21.73 | 0.44 | 0.50 | 1000.00 |
| Sundaram Mid Cap Fund | 9,880.35 | 24.37 | 0.95 | 1.00 | 1000.00 |
| UTI Mid Cap Fund | 9,788.75 | 21.45 | 0.79 | 1.00 | 500.00 |
| Motilal Oswal Midcap Fund | 7,410.69 | 34.47 | 0.64 | 1.00 | 1500.00 |
Note: The data is as of 29th February 2024. It is based on the following parameter applied on the Tickertape Mutual Fund Screener:
- Category > Equity > Mid-cap Fund
- Plan: Growth
- 3-yr CAGR – Sorted from highest to lowest
- Exit load
- Minimum SIP
Best Small-Cap SIP Mutual Funds
| Name | AUM (Rs. in cr.) | CAGR 3Y (%) | Expense Ratio (%) | Exit Load (%) | Minimum SIP (Rs.) |
| Nippon India Small Cap Fund | 43,815.61 | 36.05 | 0.73 | 1.00 | 100.00 |
| HDFC Small Cap Fund | 26,836.99 | 32.99 | 0.61 | 1.00 | 5000.00 |
| Kotak Small Cap Fund | 14,425.52 | 25.20 | 0.43 | 1.00 | 100.00 |
| HSBC Small Cap Fund | 13,230.82 | 35.23 | 0.68 | 1.00 | 500.00 |
| Quant Small Cap Fund | 13,001.83 | 44.84 | 0.77 | 1.00 | 1000.00 |
| Canara Rob Small Cap Fund | 9,586.09 | 31.88 | 0.48 | 1.00 | 1000.00 |
| Tata Small Cap Fund | 5,819.07 | 33.52 | 0.31 | 1.00 | 1500.00 |
| Bandhan Small Cap Fund | 4,289.96 | 31.55 | 0.28 | 1.00 | 100.00 |
| Mahindra Manulife Small Cap Fund | 3,502.84 | 0.00 | 0.15 | 1.00 | 500.00 |
| Edelweiss Small Cap Fund | 3,002.04 | 30.14 | 0.40 | 1.00 | 100.00 |
Note: The data is as of 29th February 2024. It is based on the following parameter applied on the Tickertape Mutual Fund Screener:
- Category > Equity > Small-cap Fund
- Plan: Growth
- 3-yr CAGR – Sorted from highest to lowest
- Exit load
- Minimum SIP
Best Flexi-Cap SIP Mutual Funds
| Name | AUM (Rs. in cr.) | CAGR 3Y (%) | Expense Ratio (%) | Exit Load (%) | Minimum SIP (Rs.) |
| Parag Parikh Flexi Cap Fund | 55,034.05 | 24.13 | 0.58 | 2.00 | 3000.00 |
| HDFC Flexi Cap Fund | 45,992.54 | 25.32 | 0.83 | 1.00 | 100.00 |
| UTI Flexi Cap Fund | 26,424.14 | 9.54 | 0.87 | 1.00 | 1500.00 |
| ICICI Pru Asset Allocator Fund | 21,399.49 | 15.03 | 0.16 | 1.00 | 1000.00 |
| SBI Flexicap Fund | 20,139.83 | 16.03 | 0.85 | 0.10 | 5000.00 |
| Franklin India Flexi Cap Fund | 13,791.53 | 22.06 | 1.04 | 1.00 | 500.00 |
| ICICI Pru Flexicap Fund | 13,742.52 | 0.00 | 0.66 | 1.00 | 5000.00 |
| Canara Rob Flexi Cap Fund | 11,609.41 | 17.52 | 0.57 | 1.00 | 1000.00 |
| Axis Flexi Cap Fund | 11,517.25 | 13.32 | 0.71 | 1.00 | 100.00 |
| DSP Flexi Cap Fund | 10,081.09 | 17.00 | 0.72 | 1.00 | 100.00 |
Note: The data is as of 29th February 2024. It is based on the following parameter applied on the Tickertape Mutual Fund Screener:
- Category > Equity > Flexi-cap Fund
- Plan: Growth
- 3-yr CAGR – Sorted from highest to lowest
- Exit load
- Minimum SIP
What is a SIP mutual fund?
Mutual funds pool money from multiple investors and invest in various securities like stocks, bonds, gold, or any other asset to generate higher returns. These are managed by professional fund managers.
SIP in mutual funds allows you to begin your investment journey in a systematic manner. It allows investors to allocate a fixed sum of money periodically (e.g., monthly or quarterly) into a best mutual fund for SIP scheme of their choice. This investment strategy is akin to a recurring deposit with a bank, where you save a fixed amount regularly, but in the case of SIPs, the money is invested in mutual funds. SIPs are favoured for their simplicity, flexibility, and the disciplined approach they bring to investing.
You can also choose between a fixed-term SIP and a perpetual SIP. A perpetual SIP has no fixed investment period and continues until you decide to stop. The investment amount can be as little as Rs. 100 per month, making it one of the best SIP plans for investors looking to start small.
Features of Mutual Funds
Mutual funds are investment vehicles that pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities. Managed by professional money managers, mutual funds offer several key features:
- Diversification: By investing in a range of securities, mutual funds reduce the risk of loss from any single investment.
- Professional management: Investors benefit from the expertise of professional fund managers who make investment decisions on their behalf.
- Liquidity: Mutual funds can be bought or sold with relative ease, providing investors with flexibility.
- Accessibility: With the ability to start investing in small amounts, mutual funds are accessible to a wide range of investors.
- Variety: There are various types of mutual funds available, including equity funds, bond funds, index funds, and more, catering to different investment objectives and risk tolerances.
How do SIPs work?
In an SIP, a fixed amount is automatically deducted from the investor’s bank account at regular intervals and invested in a best fund for SIP scheme. This method leverages the concept of rupee cost averaging, where more units of the mutual fund are purchased when prices are low, and fewer units are bought when prices are high. This strategy can potentially lower the average cost of investment over time. SIPs also benefit from the power of compounding, as the returns generated from the investments are reinvested to generate more returns.
Taxation on Equity SIP Mutual Funds as per the 2024 Budget
Understanding the latest tax regulations on equity mutual funds is essential for making informed investment decisions. The Union Budget 2024 has introduced significant changes to the taxation of equity mutual funds, simplifying the tax structure while altering rates and benefits. Here is a detailed breakdown of the new tax rules:
Short-Term Capital Gains (STCG)
If you hold equity mutual funds for less than a year, the gains from these investments are classified as short-term capital gains. According to the new budget, these gains are now taxed at a rate of 20%, which has been increased from the previous rate of 15%.
Long-Term Capital Gains (LTCG)
For equity mutual funds held for more than a year, the gains are considered long-term capital gains. The key points to note under the new budget are:
- Tax-Free Limit: Gains up to Rs. 1.25 lakh in a financial year remain tax-free. This limit has been increased from the previous threshold of Rs. 1 lakh.
- Tax Rate: Any gains above Rs. 1.25 lakh are taxed at a flat rate of 12.5%. It was previously taxed at 10%.
- Indexation: It’s important to note that the benefit of indexation, which previously allowed investors to adjust the purchase price of their assets for inflation, has been removed for all asset classes, including equity mutual funds.
Indexation is a method used to adjust the purchase price of an asset (like property or gold) for inflation over the years. This adjusted price is then used to calculate capital gains. Previously, long-term capital gains from selling property, gold, or other unlisted assets were taxed at 20%, but you could use indexation to reduce your taxable profit. The new rule simplifies the tax structure by setting a flat 12.5% tax rate for all long-term capital gains. However, it removes the indexation benefit.
Summary
| 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% |
- No Indexation Benefit: This change affects the overall tax liability, potentially increasing it for long-term investors.
Taxation on Equity Mutual Funds as per the 2024 Budget
Understanding the latest tax regulations on equity mutual funds is essential for making informed investment decisions. The Union Budget 2024 has introduced significant changes to the taxation of equity mutual funds, simplifying the tax structure while altering rates and benefits. Here is a detailed breakdown of the new tax rules:
Short-Term Capital Gains (STCG)
If you hold equity mutual funds for less than a year, the gains from these investments are classified as short-term capital gains. According to the new budget, these gains are now taxed at a rate of 20%, which has been increased from the previous rate of 15%.
Long-Term Capital Gains (LTCG)
For equity mutual funds held for more than a year, the gains are considered long-term capital gains. The key points to note under the new budget are:
- Tax-Free Limit: Gains up to Rs. 1.25 lakh in a financial year remain tax-free. This limit has been increased from the previous threshold of Rs. 1 lakh.
- Tax Rate: Any gains above Rs. 1.25 lakh are taxed at a flat rate of 12.5%. It was previously taxed at 10%.
- Indexation: It’s important to note that the benefit of indexation, which previously allowed investors to adjust the purchase price of their assets for inflation, has been removed for all asset classes, including equity mutual funds.
Indexation is a method used to adjust the purchase price of an asset (like property or gold) for inflation over the years. This adjusted price is then used to calculate capital gains. Previously, long-term capital gains from selling property, gold, or other unlisted assets were taxed at 20%, but you could use indexation to reduce your taxable profit. The new rule simplifies the tax structure by setting a flat 12.5% tax rate for all long-term capital gains. However, it removes the indexation benefit.
Summary
| 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% |
- No Indexation Benefit: This change affects the overall tax liability, potentially increasing it for long-term investors.
Criteria for selecting the best SIP mutual funds
Selecting the right SIP mutual fund involves several considerations:
- Investment objective: There are many mutual funds based on goals like retirement funds, children’s education funds, and so on. Find a plan that matches your investment objective to stay on track with your financial goals.
- Fund type: There are many types of mutual funds available in India for you to select. For instance, you can choose based on your risk tolerance—equity, debt, or hybrid. It is worthwhile to consult a financial advisor before investing in any fund.
- Performance: Evaluate the fund’s historical performance, keeping in mind that past performance is not a guarantee of future results.
- Fund house: Opt for a fund house with a strong reputation and consistent performance.
- Expense ratio: Lower expense ratios can lead to higher net returns for investors. Hence, look for mutual funds that meet your investment objectives and have a lower expense ratio.
Benefits of investing in SIP mutual funds
Apart from the ease and convenience SIP offers, here are the reasons why investing in mutual funds via SIP is a great choice:
- Limited capital: SIPs can start with as low as Rs. 100. This enables investors with low capital to generate higher long-term returns over the tenure with their limited monthly savings.
- Rupee cost averaging: The Rupee cost averaging strategy entails investing a set amount of money regularly, irrespective of whether the markets are rising or falling. This means that you get to buy more units when the market is low and fewer units when the market is high, allowing you to average the cost of fund units over time.
- Diversification opportunity: By broadening your SIP investment portfolio across best mutual funds for SIP, including equity funds, debt funds, and hybrid funds, you may limit market risks and stand a chance to earn consistent returns during downtrends or periods of high market volatility.
- Flexibility: The best SIP plans provide greater control over your investments, allowing you to start or stop them whenever you want. You can also pause a SIP and resume it afterwards. No other investment method provides you with this level of flexibility.
- Compounding: SIP investments are meant to be long-term investments. Your SIP investments compound over time, resulting in significantly higher returns.
- Financial discipline: SIP teaches you financial discipline, which is critical for investing, especially when it comes to risky investments.
Factors to consider before investing in SIP mutual funds
Objective alignment: Prior to initiating investments in SIP mutual funds, investors must rigorously define their financial objectives. These objectives serve as a foundational element in the decision-making process, guiding the selection of mutual funds that align with the investor’s risk tolerance, time horizon, and financial aspirations. Investments geared towards long-term objectives, such as selecting the best SIP for long term, may benefit from the growth potential of equity funds, whereas short-term goals may necessitate the stability offered by debt funds.
Risk tolerance assessment: An investor’s willingness to accept market volatility is paramount when selecting SIP mutual funds. Equity-oriented funds, characterised by their potential for high returns and often listed among the top SIP funds, are suited for individuals with a high tolerance for risk. Conversely, investors with a preference for stability may find debt funds more appropriate, as they typically exhibit lower volatility.
Investment horizon consideration: The duration for which an investor intends to commit to a mutual fund investment plays a critical role in fund selection. A longer investment horizon allows for the absorption of market fluctuations, potentially leading to higher returns. This makes identifying the best SIP mutual funds crucial for those committed to long-term growth. In contrast, a shorter horizon, such as a best SIP plan for 3 years, necessitates a conservative approach, favouring funds with lower risk profiles to ensure capital preservation.
Financial stability evaluation: The investor’s current financial condition influences their investment strategy. A robust financial foundation, inclusive of an emergency fund and steady income, may permit a more aggressive investment approach, leaning towards the best SIP mutual funds for maximising returns. On the other hand, investors with limited financial flexibility should consider conservative investment options to safeguard against market downturns.
Flexibility in investments: The unpredictable nature of life necessitates an adaptable investment strategy. SIP mutual funds should offer the flexibility to modify contributions in response to changes in financial circumstances, enabling investors to remain aligned with their evolving financial goals. This adaptability is key in managing investments, whether they are the best SIP plan for 3 years or the best SIP for the long term, ensuring that investors can navigate the changing economic landscape effectively.
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Conclusion
It can be difficult to select a mutual fund that suits your requirements, but a little research can go a long way in your investment journey. It is worthwhile to seek the guidance of a financial advisor. When it comes to investments, tailoring them to your risk tolerance and financial situation gives you an advantage in dealing with market volatility. You can save your efforts and time by using Tickertape’s Mutual Fund Screener to find the best mutual fund for SIP based on your risk tolerance and investment preferences!
FAQs about the best SIP to invest in
Are mutual fund taxes payable every year?
The applicable taxes on mutual funds are payable only when you redeem the units or sell the scheme. However, your dividend income from the mutual fund schemes is a part of your total income for a financial year. So, you need to pay tax for your dividend income if your income is liable to income tax.
How to choose the best mutual fund for SIP?
To get a list of the best mutual fund for SIP in India, follow these steps:
– Login to Tickertape.
– Go to Mutual Fund Screener
– Apply ‘Filters’ based on your criteria for analysis like alpha, beta, market capitalisation, etc.
You can choose from over 50 filters to get a list of the best mutual funds for SIP based on your preference.
What are SIP mutual funds?
A Systematic Investment Plan (SIP), also known as SIP, is a method of investing in a mutual fund. It allows investors to invest in a disciplined manner. Through SIP, an investor can invest a predetermined sum in a mutual fund scheme at predetermined intervals.
The investment amount can be as low as Rs. 100, and SIP intervals can be weekly, monthly, quarterly, semi-annually, or annually. SIP investing allows the investor to invest in a time-bound manner without worrying about market dynamics and benefits in the long run due to average costing and the power of compounding.
Which mutual funds are best for the long term?
Long-term investments in equity-oriented mutual funds are preferable, as they can help you achieve your long-term objectives in two ways. To begin with, it would outperform debt funds in terms of returns.
Second, because you are investing for a longer period of time, the risk factor is reduced significantly. You can also bet heavily on trusted Large cap Mutual Funds. However, it is always recommended to take your financial objective and risk appetite into consideration or talk to your financial advisor.
How to find the best mutual funds in India?
Tickertape’s Mutual Fund Screener is one of the most effective ways to find mutual funds. Equipped with over 50 filters, the Mutual Fund Screener allows you to find a suitable scheme based on your requirements in just a few clicks! You no longer need to spend long hours collating data from multiple platforms to compare various funds.
As an insatiable reader and learner, I’ve spent the last two years exploring the world of finance. With my creative mind and curious spirit, I love making complex finance topics easy and fun for everyone to understand. Join me on my journey as we navigate the world of finance together!
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