As far as the best SIP plans in India are concerned, it must be recognized that the respective returns are totally subject to the choice of the fund.
Therefore it is necessary to choose from among some of the best SIP plans that aim to garner considerable returns.
Before that, it would be helpful to first consider the fundamental benefits of investing in SIPs:
- First and foremost, systematic investment plans ensure a relatively disciplined and mature savings. Therefore, it is important to begin investing early in SIPs.
- Secondly, as there is particular lock in period in a systematic investment plan, it is all the more flexible. Investors may exit at any point of time.
- The SIPs are best suited to engendering long term gains. The initial investment being small, there is a fair scope of a gradually magnified return.
- One of the most evident benefits of the SIP is that it is the most conducive, user friendly and hassle free modes of investment.
- As far as small retail investors are concerned, they generally aim for SIP as it possesses a moderate level of risks.
As far as the best SIP plans in India are concerned, the following are some of the finest mutual fund plans that have become increasingly popular among potential investors:
- HDFC Small Cap Fund
- DSP Black Rock Midcap Fund
- HDFC Midcap Opportunities Fund
- Birla SL Equity Fund
- HDFC Balanced
- ICICI Prudential Equity and Debt Fund
- SBI Magnum Balanced Fund
- ICICI Prudential Value Discovery
- Reliance Liquid Treasury Plan
How to Choose the Best SIP Plan in India?
Generally speaking, people tend to get befuddled with the number of choices in the investment sphere. As a result, most policyholders end up purchasing an erroneous plan. Therefore, it is of utmost significance to understand certain fundamental things before buying a plan.
- First and foremost, one must be aware that there are four different types of SIPs in the market. They are: top up, flexible, perpetual and trigger.
- It is important to be clear about one’s investment goal. Before shelling out the payment, the potential policyholder must know his or her risk appetite, expected returns and investment aims.
- It is recommended to first dig through each and every plan in order to create a conducive and comprehensive picture in mind. Of especial mention are investors with long term goals.
- The primary feature of systematic investment plans is that they allow investment in small amounts. Therefore, it is advised not to invest an amount which the policyholder may not be able to continue investing through the rest of the year.
- Certain misconceptions are to be done away with. According to the general perception, SIPS are meant primarily for paltry investments. Taking into consideration the compounding and the time value of the money being invested, one should be able to understand the genuine principles of SIP.
- It must be clarified that SIPs are not short term investments. The investment amount should not be taken into account as it is directly proportional to the time. In other words, the longer the time of the investment term, the higher the amount.
- As far as naïve policyholders are concerned, they, generally speaking, tend to set unfeasible investment goals only to repent eventually.
- To clear it at the outset, a potential policyholder should not expect colossal returns from his or her existing investment. A better philosophy would be expect modest or average returns and continue with the regular investment process.
- There is no set rule as to whether an investor must pick on the dividend option or the growth option. Most investors tend to insist on the former, for unknown, often hilarious, reasons.
- It is important to keep in mind that either of the two may be chosen in order to nourish the corpus and accordingly edge towards the chosen investment goal.
- One of the most common misconceptions about SIPs is that the investor should not tinker with them even when one is in the fatter phase of finance.
- It must be reiterated here that there is absolutely no concrete reason for not doing so. When an investor is financially high, he or she may choose to contribute a lump sum to his or her SIP account.
Most people are also unaware of the amount to start with before investing. Rough calculations are not to be encouraged as they may be erroneous and eventually disastrous.
As far as the best SIP plans are concerned, it is generally advised to begin with an amount of Rs. 500. The benefit of investing with a relatively paltry amount in SIP is that even with a small amount, the concerned investor can conveniently affix a particular time period in order to achieve his or her investment goal.