There are two friends who have started investing in SIP at the same time, but after a period of 5 years, one has created a healthy portfolio while the other is struggling to get an optimum return; however, the investment amount is equal. This is all because the other person is not investing in the Best SIP Plan.
In today’s blog post, we will discuss the key factors that can help an investor in choosing the best SIP plans.
What is a SIP?
The systematic investment plan, commonly known as SIP, is a mode of investing in mutual funds. Through SIP, an investor contributes or invests a fixed sum of money regularly in a selected mutual fund. A fixed amount is automatically deducted on the defined date from the bank account of the investor and invested in the scheme.
How to Choose the Best SIP Plans
To choose the best SIP plan, one can follow the steps mentioned below:
1. Identify your financial goal
Before starting an SIP, one must identify their financial goal and why they want to start a SIP. The common goals in an investor’s life would be purchasing a house, a retirement corpus, child education, etc.
2. Understand Risk
Every investor has a different risk-bearing capacity; some are comfortable with market movement, whereas others do not want to take risks. And mutual funds have different categories, including equity, debt, hybrid, etc. Therefore, one must choose a category based on one’s risk appetite.
Based on the risk profile investors can be classified into three different categories which are as follows:
| Risk Level | Suitable Category |
|---|---|
| Conservative | Debt and Hybrid Fund |
| Moderate | Large, Mid and Multi Cap Fund |
| Aggressive | Small Cap and Sectoral |
3. Investment Horizon
The duration for which you are investing money must be identified before choosing the best SIP plan. Equity funds are generally suitable for an investment horizon of more than 5 years, and below 5 years, debt and hybrid funds below 5 years.
The investment horizon can be categorised into the following categories:
- For Short Term: 1 – 3 Years
- For Medium Term: 3 – 7 Years
- For Long Term: More than 7 Years
4. Choosing the Correct Category
Every category in a mutual fund offers different returns, as small-cap funds generally offer higher returns than large-cap funds in the long-run. Therefore, choosing the right category is important for an investor.
5. Evaluate Performance
It is often said that past performance does not guarantee future return; however, evaluating long-term performance can help an investor in making informed decisions.
6. Evaluating Expense Ratio
Expense ratio is a is a annual fee charged by a fund management company to manage your investments. A higher fund management charge can lower your returns. Hence, it is advisable to compare expense ratios among similar categories of funds.
Best SIP Plans for 2026
The best SIP plans for 2026 are as follows:
| Funds | Launch Date | Net Assets (Cr) | Base Expense Ratio | 1-Yr Return | 3-Yr Return | 5-Yr Return | Exit Load | Fund Manager |
|---|---|---|---|---|---|---|---|---|
| HSBC Midcap Fund | 2004-08-09 | 14,249 | 1.46 | 18.52 | 27.03 | 19.25 | 1.00 (365) | Cheenu Gupta |
| DSP Natural Resources and New Energy Fund – Regular Plan | 2008-04-25 | 2,457 | 1.71 | 21.18 | 21.79 | 16.1 | — | Rohit Singhania |
| HDFC Pharma And Healthcare Fund – Regular Plan | 2023-10-04 | 2,362 | 1.72 | 23.26 | — | — | 1.00 (30) | Nikhil Mathur |
| Kotak MNC Fund – Regular Plan | 2024-10-28 | 2,113 | 1.75 | 23.43 | — | — | 0.50 (90) | Abhishek Bisen, Harsha Upadhyaya, Dhananjay Tikariha |
| Union Small Cap Fund – Regular Plan | 2014-06-10 | 2,094 | 1.75 | 18.61 | 19.62 | 18.09 | 1.00 (15) | Pratik Dharmshi , Gaurav Chopra |
| Quant Value Fund – Regular Plan | 2021-11-30 | 1,859 | 1.77 | 19.64 | 24.56 | — | 1.00 (15) | Sanjeev Sharma , Ankit A Pande, Sandeep Tandon , Ayusha Kumbhat , Varun Pattani , Sameer Kate , Yug Tibrewal |
| Quant BFSI Fund – Regular Plan | 2023-06-20 | 784 | 2.02 | 18.57 | 26.65 | — | 1.00 (15) | Ayusha Kumbhat , Sanjeev Sharma , Sandeep Tandon , Ankit A Pande , Varun Pattani , Sameer Kate , Yug Tibrewal |
| WhiteOak Capital Pharma and Healthcare Fund – Regular Plan | 2024-02-06 | 664 | 2.05 | 19.67 | — | — | — | Dheeresh Pathak , Piyush Baranwal , Ramesh Mantri , Ashish Agrawal , Trupti Agrawal |
| Kotak Healthcare Fund – Regular Plan | 2023-12-11 | 560 | 2.08 | 19.95 | — | — | 0.50 (30) | Abhishek Bisen , Dhananjay Tikariha |
| Motilal Oswal Active Momentum Fund – Regular Plan | 2025-03-17 | 469 | 2.1 | 24.17 | — | — | 1.00 (90) | Varun Sharma , Bhalchandra Shinde , Ajay Khandelwal , Vishal Ashar , Rakesh Shetty |
Read Also: Best SIP Mutual Funds in India
Common Mistakes to Avoid
The common mistakes which one should avoid while choosing the best SIP plan are as follows:
- Investing without a Financial Goal: If you start an SIP without any specific financial goal, you might end up selecting an incorrect category of fund or scheme. Hence, category and scheme selection should be based on the investment goal.
- Chasing only Returns: Chasing only the returns is a common mistake that an investor makes. They often invest in the funds that have given extraordinary returns in the past; however, this should not be the sole criteria for investing in mutual funds.
- Portfolio Overlapping: Investors think that starting SIPs in too many funds means better diversification; this is not true. Having too many funds in the portfolio eventually leads to portfolio overlap.
- Review: After starting an SIP, very few investors review their portfolio. It is essential to periodically review your SIP portfolio to eliminate non-performing schemes.
How to Invest in Mutual Fund SIP through Pocketful
- Open your Account: If you do not have an account on Pocketful, you will need to open a demat account, which is free and has zero account opening charges and zero AMC. The KYC takes maybe 5-10 minutes, PAN, Aadhaar, bank details, and a quick video verification.
- Look for the Mutual Funds tab: Once you log in to the app, there is a dedicated section just for mutual funds. You can do everything you need, exploring schemes, comparing them, tracking your existing investments
- Now, pick your fund: Pocketful gives you direct plans. Search for the scheme you have in mind, or browse by category if you are still deciding between large cap, flexi cap, or whatever fits your goals.
- Choose SIP, not lump sum: Select the SIP option instead of a one-time payment. Decide how much you want to invest. You can also start with even ₹500 a month. Then pick your preferred date and payment method.
- Set up the E-mandate and Autopay: An e-mandate is basically a standing instruction to your bank, authorising it to auto-debit your SIP amount every month. You will usually do this through UPI Autopay in the app. Now, you do not need to manually pay every month.
Read Also: Best SIP Apps in India for Investment
Conclusion
On a concluding note, to start investing in the best SIP plans, one should not focus on chasing only past returns, and a SIP best for one person may not be right for another; therefore, instead of investment should be based on risk profile, financial goal, investment horizon, etc. of an investor. SIP is a long-term wealth creation tool, and one must review their investment regularly. And before making any investment, one must consult their investment advisor.
Frequently Asked Questions (FAQs)
Can I change my SIP amount?
No, you cannot change your SIP amount; instead, you can stop the existing SIP and start another SIP of the revised amount.
Which mutual fund is best for SIP?
There is no such mutual fund that can be best suited for the SIP. The best mutual fund often depends on the investor’s risk profile, investment horizon, and financial goal.
Is it mandatory to have a demat account to start SIP?
No, to start an SIP, having a demat account is not necessary.
Can I start multiple SIPs in the same fund on different dates?
Yes, you can start multiple SIPs in the same fund on different dates. The defined amount will be deducted on the selected date.
What is the minimum amount required to start an SIP?
The minimum amount which an investor required to start an SIP is INR 100. However, the minimum SIP amount varies across schemes and AMCs. Therefore, you need to check with the AMC before starting any SPI.
