Last Updated on Feb 8, 2024 by Harshit Singh
Not every investment needs a lumpsum amount to invest. A few investments, like mutual funds, allow you (the investor) to invest in regular intervals via SIP (Systematic Investment Plan). Not just that, an SIP investment can be started with as low as Rs. 100. In this article, learn about the best SIP plans for Rs. 1,000 per month, along with factors to consider while investing in SIPs and taxation.
Table of Contents
What is SIP?
A Systematic Investment Plan (SIP) is a method for investing in mutual funds that allows investors to invest fixed amounts at regular intervals (e.g., monthly or quarterly). Investing through SIP encourages disciplined investing by automating savings and investment processes. It allows investors to participate in the financial markets without needing to time the market.
SIP offers flexibility in investment by allowing adjustments in investment amounts and the option to pause or stop investments as needed. SIPs provide a way to diversify your investments across various assets for generating wealth over time with small and regular amounts.
Best SIP plans for Rs. 1,000 per month with highest 1Y return
| Mutual fund name | Sub Category | AUM (Rs. in cr.) | Absolute Returns – 1Y (%) | Expense Ratio (%) | Minimum SIP (Rs.) |
| Invesco India PSU Equity Fund | Thematic Fund | 697.29 | 86.74 | 1.06 | 500 |
| Aditya Birla SL Nifty Smallcap 50 Index Fund | Index Fund | 134.46 | 79.89 | 0.50 | 500 |
| HDFC Infrastructure Fund | Sectoral Fund – Infrastructure | 1,310.65 | 77.69 | 1.53 | 100 |
| Bandhan Small Cap Fund | Small Cap Fund | 3,880.25 | 75.97 | 0.30 | 100 |
| Nippon India Power & Infra Fund | Sectoral Fund – Energy & Power | 3,460.65 | 73.95 | 1.28 | 100 |
| Mahindra Manulife Small Cap Fund | Small Cap Fund | 3,100.00 | 73.34 | 0.18 | 500 |
| Franklin India Opportunities Fund | Thematic Fund | 2,135.34 | 70.24 | 0.54 | 500 |
| ITI Small Cap Fund | Small Cap Fund | 2,085.37 | 70.09 | 0.19 | 500 |
| Edelweiss Nifty Midcap150 Momentum 50 Index Fund | Index Fund | 129.12 | 69.10 | 0.14 | 100 |
| Tata Nifty Midcap 150 Momentum 50 Index Fund | Index Fund | 210.90 | 68.53 | 0.32 | 150 |
Note: The above list of the best SIP plans for Rs. 1,000 with highest return is derived from Tickertape’s Mutual Fund Screener using the following filters:
- Absolute 1-yr returns – sorted high to low
- Expense ratio
- Minimum SIP – limited to Rs. 1,000
Note: The data is from 8th February 2024.
Best Rs. 1,000 per month SIP for 3 years
| Mutual fund name | Sub Category | AUM (Rs. in cr.) | CAGR 3Y (%) | Expense Ratio (%) | Minimum SIP (Rs.) |
| ICICI Pru Overnight Fund | Overnight Fund | 11,264.70 | 126.16 | 0.10 | 500 |
| Invesco India PSU Equity Fund | Thematic Fund | 697.29 | 40.80 | 1.06 | 500 |
| Nippon India Small Cap Fund | Small Cap Fund | 45,894.01 | 40.39 | 0.67 | 100 |
| HSBC Small Cap Fund | Small Cap Fund | 13,980.75 | 39.30 | 0.69 | 500 |
| HDFC Infrastructure Fund | Sectoral Fund – Infrastructure | 1,310.65 | 38.25 | 1.53 | 100 |
| Nippon India Power & Infra Fund | Sectoral Fund – Energy & Power | 3,460.65 | 37.78 | 1.28 | 100 |
| ICICI Pru Commodities Fund | Thematic Fund | 1,878.29 | 36.24 | 1.11 | 100 |
| DSP India T.I.G.E.R Fund | Sectoral Fund – Infrastructure | 3,023.00 | 35.79 | 1.09 | 100 |
| Edelweiss Small Cap Fund | Small Cap Fund | 3,002.04 | 34.09 | 0.40 | 100 |
| Bandhan Small Cap Fund | Small Cap Fund | 3,880.25 | 33.87 | 0.30 | 100 |
Note: The above list of the best SIP plans for Rs. 1,000 for long-term is derived from Tickertape’s Mutual Fund Screener using the following filters:
- 3-yr CAGR – sorted high to low
- Expense ratio
- Minimum SIP – limited to Rs. 1,000
Note: The data is from 8th February 2024.
Best Rs. 1,000 per month SIP for 5 years
| Mutual fund name | Sub Category | AUM (Rs. in cr.) | CAGR 5Y (%) | Expense Ratio (%) | Minimum SIP (Rs.) |
| ICICI Pru Overnight Fund | Overnight Fund | 11,264.70 | 65.98 | 0.10 | 500 |
| Edelweiss Small Cap Fund | Small Cap Fund | 3,002.04 | 32.30 | 0.40 | 100 |
| Nippon India Small Cap Fund | Small Cap Fund | 45,894.01 | 32.06 | 0.67 | 100 |
| Kotak Small Cap Fund | Small Cap Fund | 14,082.01 | 29.63 | 0.43 | 100 |
| Invesco India PSU Equity Fund | Thematic Fund | 697.29 | 29.21 | 1.06 | 500 |
| Nippon India Power & Infra Fund | Sectoral Fund – Energy & Power | 3,460.65 | 28.26 | 1.28 | 100 |
| SBI Contra Fund | Contra Fund | 21,481.78 | 27.66 | 0.69 | 500 |
| Edelweiss Mid Cap Fund | Mid Cap Fund | 4,623.64 | 27.17 | 0.43 | 100 |
| HSBC Small Cap Fund | Small Cap Fund | 13,980.75 | 26.97 | 0.69 | 500 |
| DSP India T.I.G.E.R Fund | Sectoral Fund – Infrastructure | 3,023.00 | 26.79 | 1.09 | 100 |
Note: The above list of Rs. 1,000 per month SIP for 5 years is derived from Tickertape’s Mutual Fund Screener using the following filters:
- 5-yr CAGR – sorted high to low
- Expense ratio
- Minimum SIP – limited to Rs. 1,000
Note: The data is from 8th February 2024.
Best SIP plan for 10 years
| Mutual fund name | Sub Category | AUM (Rs. in cr.) | CAGR 10Y (%) | Expense Ratio (%) | Minimum SIP (Rs.) |
| HDFC Money Market Fund | Money Market Fund | 17,520.98 | 69.68 | 0.23 | 100 |
| HDFC Liquid Fund | Liquid Fund | 46,724.15 | 68.79 | 0.20 | 100 |
| Edelweiss Liquid Fund | Liquid Fund | 5,331.30 | 68.79 | 0.08 | 100 |
| UTI Overnight Fund | Overnight Fund | 7,043.84 | 68.05 | 0.05 | 500 |
| HDFC Overnight Fund | Overnight Fund | 8,916.52 | 67.60 | 0.10 | 100 |
| Nippon India Small Cap Fund | Small Cap Fund | 45,894.01 | 29.88 | 0.67 | 100 |
| Edelweiss Mid Cap Fund | Mid Cap Fund | 4,623.64 | 25.18 | 0.43 | 100 |
| Kotak Small Cap Fund | Small Cap Fund | 14,082.01 | 25.05 | 0.43 | 100 |
| Mirae Asset Large & Midcap Fund | Large & Mid Cap Fund | 32,492.17 | 24.99 | 0.62 | 500 |
| HDFC Mid-Cap Opportunities Fund | Mid Cap Fund | 56,032.99 | 23.93 | 0.80 | 100 |
Note: The above list of the best SIP Rs. 1,000 per month for 10 years is derived from Tickertape’s Mutual Fund Screener using the following filters:
- 10-yr CAGR – sorted high to low
- Expense ratio
- Minimum SIP – limited to Rs. 1,000
Note: The data is from 8th February 2024.
Benefits of investing in mutual funds through SIP
- Rupee Cost Averaging: SIP allows investors to purchase more units when prices are low and fewer units when prices are high, averaging out the cost of investment over time. This strategy can lead to lower average costs per unit, which is beneficial in volatile markets.
- Power of Compounding: The returns generated from SIP investments are reinvested to generate additional earnings over time. This phenomenon is called the compounding effect. Over long periods, let’s say 5 years or 10 years, disciplined investing through SIP can significantly create wealth to meet long-term goals.
- Flexibility and Convenience: With SIPs, an investor can start investing in mutual funds with a small amount and have the flexibility to adjust (increase or decrease) the investment amount. SIPs offer the convenience of automatic deductions from a bank account, making the investment process hassle-free.
- Diversification and Risk Management: Investing through SIPs in mutual funds provides diversification across various assets, reducing the risk of investing in single stocks or sectors. This approach helps in mitigating risk effectively.
Factors to consider before investing in a SIP
Similar to any other investment, there are certain factors you need to be aware of before investing in a mutual fund SIP.
- Investment objective – The first and foremost factor to consider while investing in any investment is your investment objective. Know your investment goal and the time horizon. Only then you’ll be able to decide on the right SIP that suits your needs.
- Risk appetite – The amount you want to invest in an investment is the risk you are willing to take. Check your risk tolerance and invest accordingly. Ensure you have left room for emergency funds.
- Scheme’s performance – Not all the investments that fit your goals are good. Check the past performance of the scheme before investing.
- Additional costs – Check the fees involved in a SIP scheme before investing.
- Fund house credentials – Research the credentials of the fund house you are selecting the SIP from.
Can a minimum investment of Rs. 1,000 in SIP make profits?
Mutual funds SIP works on the magic of compounding. You investment increases on the basis of compound interest and a large corpus is accumulated at the end of the tenure. For example, if you’ve invested Rs. 1,000 in 2024 for returns of 10% per annum returns and tenure of 10 yrs, the profits are as follows:
| Year | Invested amount per annum (Rs.) | Wealth gained annually (Rs.) | Total amount (Rs.) |
| 2024 | 12,000 | 670 | 12,670 |
| 2025 | 12,000 | 1,997 | 26,667 |
| 2026 | 12,000 | 3,463 | 42,130 |
| 2027 | 12,000 | 5,082 | 59,212 |
| 2028 | 12,000 | 6,870 | 78,082 |
| 2029 | 12,000 | 8,847 | 98,929 |
| 2030 | 12,000 | 11,029 | 1,21,958 |
| 2031 | 12,000 | 13,441 | 1,47,399 |
| 2032 | 12,000 | 16,105 | 1,75,504 |
| 2033 | 12,000 | 19,048 | 2,06,552 |
At the end of the 10th year, the returns on your investment of Rs. 1,000 monthly will be Rs. 2,06,552.
Taxation on SIP
Taxes on mutual fund SIPs depend on the investment time period as follows:
- Long-term capital gains (LTCG) – If the investment is made for more than 12 months, then it is considered as LTCG.
– In the case of equity funds, if the investment gains exceed Rs. 1 lakh, you are taxed at 10%. And if the investment gains are less than Rs. 1 lakh, the gains are tax-free.
– In the case of debt funds, the gains are taxed at 20% with indexation benefits. - Short-term capital gains (STCG) – If the investment is made for less than 12 months, it is considered STCG.
– In the case of equity funds, the STCG is taxed at 15%.
– In the case of debt funds, the gains are taxed as per the investor’s income tax slab.
Conclusion
SIP is a convenient option to invest in mutual funds. It allows you to invest at periodic intervals and also benefit from the power of compounding. However, like any other investment, there are certain risks like default, credit, liquidity risks, etc. Hence be careful and invest after thorough research about the scheme.
You can use Tickertape to understand a fund’s fundamentals. Log in to Tickertape and search for a fund. In the fund page you’ll get all the important metrics like returns, AUM, financials and more. You can also add the fund to your Watchlist and monitor it on a regular basis.
FAQs
1. How to get the list of best SIP plans for 5 yrs?
– Log in to Tickertape
– Launch the Mutual Fund Screener
– Click on ‘Add Filter’
– Search for ‘SIP Investment’ and select it
– Search and select ‘Lock-in’. Set the lock-in years to high (3 to 5yrs)
Sort the results according to your preferred parameter 5Y CAGR, 3Y CAGR, 1Y Absolute Returns, etc., to get the best SIP plans for 5 yrs.
2. Which is the best SIP plan in India?
– Log in to Tickertape
– Launch the Mutual Fund Screener
– Click on ‘Add Filter’
– Search for ‘SIP Investment’ and select it
Sort the list according to your preferred parameter 3Y CAGR, 5Y CAGR, 1Y Absolute Returns, AUM etc., to find the best SIP plan in India.
As an investment fanatic, I’ve dabbled in early-stage startups, mutual funds, gold, stocks, smallcases, and real estate to identify which assets generate the highest ROI. At Tickertape, I’m dedicated to presenting my learning and providing insightful suggestions to help my readers make sound investment decision.
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