Top 10 Systematic Investment Plan (SIP) Plans in India

There are several companies that allow investment in the SIP. However, the investor has to find out the best plan so that he can get the maximum return in future. Currently, some of the best SIP plans in India include:

The Top 10 SIP Plans in India are:

1. Religare Mid N Small Cap Fund - Growth
2. DSP BlackRock Small and Midcap Fund - Growth
3. SBI MSFU Emerging Business Fund - Growth
4. HDFC Midcap Opportunities Fund - Growth
5. UTI Mastervalue fund - Growth
6. ING dividend Yield Fund - Growth
7. Religare Midcap Fund - Growth
8. Canara Robeco Emerging Equities - Growth
9. Reliance Equity Opportunities - G
10. BNP Paribas Future Leaders Fund - G

How Systematic Investment Plan (SIP) works

No matter how much money you have, investing should be easy and affordable. With our systematic investment facility you can invest as low as Rs. 500 per month and grow your wealth over time.

 

Whatever your dreams, realize them one step at a time

 

We all have various dreams that we want to realize – owning a car, a house or going on a vacation. Besides these, we also need to plan for our children’s education, their marriage and our own retirement. Achieving these dreams may seem like a difficult task, but with Systematic Investment Planning (SIP) it is possible to do so one ‘SIP’ at a time.

SIP or systematic investment planning is a method through which you can invest in any of our mutual fund, investment plan or pension scheme through small and periodic installments. In fact you can invest as low as Rs. 500 on a monthly basis and decide how you want to go about it.

• You decide on the amount you wish to invest regularly
• You decide how much money you wish to invest
• You decide for how long you want to continue investing
• You can change the payment schedule and investing amounts at your wish and convenience
• You don’t have to pay any charges or penalty if you miss an investment date

How SIP works?

 

Starting an SIP with any of our investment schemes is easy. Just follow the steps given below.

Step 1: Set a goal that you wish to achieve

 

The first step to achieving your dreams is to have a clearly defined goal or objective in mind. To achieve any goal you will have to save money for it on a regular basis. Also you need to know when you want to achieve this goal and how much money you would like to have at the time of it’s completion.

For example, your goal could be to ‘take a vacation in 5 years from today’, and to make this goal a reality, you may be requiring Rs. 500,000.

Step 2: Start SIP to meet this goal

 

Once you have identified your financial goal, the next step is to do Systematic Investment Planning so you know how you can achieve this goal. To do so you can use formula for SIPs return calculation. 

A = S*R*(R Power n -1)/(R-1)

In the above formula :-

A = maturity amount

S = SIP amount (plz. note in case of multiple monthly SIPs it`s advisable to clubbed all SIPs considering a big single SIP)

n = Time duration of SIPs

R = 1 + r/100 (where r is mly. rate of return)

Plz. note if the SIP frequency is qtly. adjust the rate of return to it`s frequency.

The above formula is some what complicated to calculate manually so it`s advisable to use EXL sheet.

 

This will tell you much money your regular investments can grow over time.

In this case, in order to achieve a target of Rs. 500,000 in 5 years for a vacation, you need to invest approximately Rs. 6,000 on a monthly basis in an investment solution that can give you a return of approximately 14% p.a. over a period of 5 years.

Step 3: Invest regularly to achieve your goal

 

Once you have determined which investment solution is best for you, you need to diligently follow the SIP payment plan you have created for yourself. At first, you may feel like the amount you are taking out from your overall savings may cause a dent in your budget, but stay focused on the overall goal that you wish to achieve. Also remember one thing, we earn regularly, we spend regularly, we should also save and invest a part of our earnings regularly to achieve our goals in life. After a while, you will realize that the regular monthly savings amount have become a part of your monthly budget.

Procedure to invest in mutual funds through Systematic Investment Plan (SIP)

Investment through SIP is a good investment vehicle which offers benefit of disciplinary regular savings and Rupee Cost Averaging.

One can start an investment plan through SIP mode by filling up the forms,
1) Common Application Form.
2) a SIP Enrolment Form. 
3) one Auto Debit Form.

First investment in SIP is done through a cheque of the same bank account through which the client wishes to avail Auto Debit Facility.

There are various options available to start an SIP with a mutual fund.

1) Branch Offices of MF - You can walk into any of the mutual fund offices (Reliance MF, TATA MF, ICICI Pru MF, SBI MF etc) and fill the application form for an SIP that you have chosen specific to that company.

2) You can start a demat account with any of the leading financial services providers like Karvy, Bajaj Capital, Bluechip. These companies will also be able to offer you advice about different mutual funds.

3) You can open a demat account with any of the leading banks like SBI, ICICI, Axis etc. You will be sent a user ID and password. You can log into their website and start your SIP in a fund from any mutual fund company.

The brokerage charges may vary marginally between all these options. However since you seem to be a computer savvy person, it would make sense to open a demat a/c and get a user ID. You can do your financial planning through the internet in the comfort of your home or office. You will not only save time but can take independent decisions by exploring different mutual funds yourself. You will also be able to check your portfolio at one glance and make changes as.

Systematic Investment Plan (SIP)

A program that allows an individual to have a set amount electronically transferred from one account to another at a specified frequency. Examples include stock and mutual fund reinvestment programs, defined contribution plans, mutual fund contribution programs, and automatic withdrawal plans. also called “automatic investment plan”.

SIP works on the principle of regular investments. It is like your recurring deposit where you put in a small amount every month. It allows you to invest in a MF by making smaller periodic investments (monthly or quarterly) in place of a heavy one-time investment i.e. SIP allows you to pay 10 periodic investments of Rs 500 each in place of a one-time investment of Rs 5,000 in an MF. Thus, you can invest in an MF without altering your other financial liabilities. It is imperative to understand the concept of rupee cost averaging and the power of compounding to better appreciate the working of SIPs.

SIP has brought mutual funds within the reach of an average person as it enables even those with tight budgets to invest Rs 500 or Rs 1,000 on a regular basis in place of making a heavy, one-time investment.

While making small investments through SIP may not seem appealing at first, it enables investors to get into the habit of saving. And over the years, it can really add up and give you handsome returns. A monthly SIP of Rs 1000 at the rate of 9% would grow to Rs 6.69 lakh in 10 years, Rs 17.83 lakh in 30 years and Rs 44.20 lakh in 40 years.

Even for the cash-rich, SIPs reduces the chance of investing at the wrong time and losing their sleep over a wrong investment decision. However, the true benefit of an SIP is derived by investing at lower levels.