SIP stands for a systematic investment plan, which invests a fixed amount in mutual funds every month. As an investor, you can start investing in mutual funds even with the Rs 500 SIPs monthly. The best thing is that the money will be automatically deducted from your account monthly and invested in mutual funds on a fixed date. There is no defined rule to invest any particular amount or date; as per your comfort zone, you can invest.
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How to become rich with SIPs?
Today, almost everyone wants to become rich, and there are many ways to do so, but investing is one of them. To become rich, one has to invest in long-term financial goals and have an investment portfolio.
And in long-term investment, you have to choose the suitable mode of investing to become rich; you should start with the SIP and enhance your investment annually to grow your income.
Let’s understand with the following example:
If you start your SIPs with the Rs 5,000 mutual funds monthly, your investment will be for 20 years, and the expected return will be 12%. As your return would be 12% on a monthly 5000 rupee SIP, the maturity amount would be Rs 49.5 lakhs, your net investment would be Rs 12 lakh, and the wealth gained would be doubled.
As there are SIP plans:
- 5 Years Plan
- 7-Year Plan
- 10 Years Plan
- 12 Years Plan
- 15-Year Plan
- 20-Year Plan
Types of SIPs:
- Flexible SIPs
- Perpetual SIPs
- Top-up SIPs
Flexible SIPs
This allows the increase and decrease of the periodic investment as per your need; the amount is fixed when you start investing, but you can change it within seven days.
Perpetual SIPs
This regular has a start and end date; this SIPs only has an end date, but it will continue the investment until it is specifically stopped.
Top-up SIPs
With this, you can increase the existing SIPs amount periodically and earn more if you want to increase your investment.
Top 10 SIP Investment in 2023
| Best SIP Plans | Features | Minimum SIP Amount |
| Canara Robeco Bluechip Equity Fund – Growth | NAV: ₹45.76 AUM: ₹8642.25 Crore Expense Ratio: 0.42%Minimum Investment: ₹1000, Lump Sum ₹50003-Year Annualized Return: 15.5% 5-Year Annualized Return: 14.0% Risk: Very High |
₹1,000 |
| Mirae Asset Large Cap Fund Direct Plan-Growth | NAV: ₹84.97 AUM: ₹34,194.26 Crore Expense Ratio: 0.53%Minimum Investment: ₹1000, Lump Sum ₹50003-Year Annualized Return: 15.0% 5-Year Annualized Return: 11.5% Risk: Very High |
₹1,000 |
| PGIM India Flexi Cap Fund Direct-Growth | NAV: ₹27.69 AUM: ₹5,283.6 Crore Expense Ratio: 0.37%Minimum Investment: ₹1000, Lump Sum ₹5,0003-Year Annualized Return: 22.8% 5-Year Annualized Return: 15.0% Risk: Very High |
₹1,000 |
| Quant Mid Cap Fund | NAV: ₹139.11 AUM: ₹1,329.97 Crore Expense Ratio: 0.63%Minimum Investment: ₹1000, Lump Sum ₹50003-Year Annualized Return: 33.9% 5-Year Annualized Return: 19.5% Risk: Very High |
₹1,000 |
| SBI Focused Equity Fund | NAV: ₹238.72 AUM: ₹27,818.57 Crore Expense Ratio: 0.69%Minimum Investment: ₹500, Lump Sum ₹50003-Year Annualized Return: 11.9% 5-Year Annualized Return: 11.4% Risk: Very High |
₹500 |
| HDFC Index S&P BSE Sensex Direct Plan Growth | NAV: ₹547.95 AUM: ₹4,141.51 Crore Expense Ratio: 0.2%Minimum Investment: ₹100, Lump Sum ₹1003-Year Annualized Return: 15.2% 5-Year Annualized Return: 12.5% Risk: Very High |
₹100 |
| Axis Bluechip Fund Direct-Growth | NAV: ₹471.3 AUM: ₹35,197.66 crore Expense Ratio: 0.56%Minimum Investment: ₹100, Lump Sum ₹50003-Year Annualized Return: 9.9% 5-Year Annualized Return: 12.1% Risk: Very High |
₹100 |
| Navi Nifty Next 50 Index Fund – Growth | NAV: ₹8.74 AUM: ₹95.61 Crore Expense Ratio: 0.12%Minimum Investment: ₹10, Lump sum: ₹103-Year Return: N/A 5-Year Return: N/A Risk: Very High |
₹10 |
| IDFC Nifty 50 Index Fund | NAV: ₹37.59 AUM: ₹582.43 Crore Expense Ratio: 0.10%Minimum Investment: ₹100, Lump Sum ₹50003-Year Annualized Return: 15.6% 5-Year Annualized Return: 11.7% Risk: Very High |
₹100 |
| ICICI Prudential Technology Fund Growth | NAV: ₹148.12
AUM: ₹8,794.16 Crore Expense Ratio: 0.89% Minimum Investment: ₹100, Lump Sum ₹5000 3-Year Annualized Return: 32.4% 5-Year Annualized Return: 22.55% Risk: Very High |
₹100 |
Benefits of SIPs in Mutual Funds
- Simply an Easy Investment
- Financial Discipline
- Starting Early and Small
- Rupee cost averaging
- The Power of Compounding
Simply an Easy Investment
Simply Easy Investment is the regular Investment for making wealth. As you start investing in this, you can initiate ECS on your bank account to invest a certain amount of your bank money into SIP mutual funds monthly; from this point on, you need not worry. It is an easy and simple investment to do automatically.
Financial Discipline
The reason to become rich through SIPs is to invest regularly and fixed amount every month.
Starting Early and Small
As you grow your wealth early with small but regular investments, that will lead you to become rich. SIPs of Rs 500 is small, but investing periodically will give you large wealth and an increase in income.
Rupee cost averaging
In this Investment, equity markets have always been volatile, so there is a risk of market fluctuation because as you fix the amount every month in mutual funds, the investor will buy more units, and when the market dips, fewer units will be sold, which reduces the cost per unit. As the factor of volatility is reduced, it will increase the gains.
The Power of Compounding
You earn money through the power of compounding, and investing a small amount of money will give you a longer duration to get good returns by investing regularly. Through this, you can achieve your long-term financial goals.
How SIP calculator calculate the returns on mutual funds?
It is a calculator that is online tool that helps you calculate the return of your SIP in mutual funds. It is the most popular tool used by investors. This tool basically helps you to give ideas regarding the returns that you expect from investing in the mutual funds.
How does the SIP calculator work?
It is simple to use; you have to enter the values for if you have invested, duration of Investment, frequency of Investment, and expected rate of return.
The result displays on the screen as it uses the compound interest formula to give you a result.
Conclusions
As it is ideal for growing and becoming rich, you can regularly invest in the market with a reduced risk of fluctuation. It is easy and flexible to grow your wealth for the future.
As a beginner, you invest in a Mutual Funds; which has low-cost funds of Rs 10, so you can give it a chance.
