SIP Plans for 5 Years Investment Horizon (2024)
Systematic Investment Plans (SIPs) have become an increasingly popular choice for investors in India due to their convenience and the power of compounding they offer. Particularly for those with a medium-term investment horizon like 5 years, there are several excellent SIP options. If you're pondering over which SIP is best for 5 years or are looking for the best SIP plan for 5 years in India, this article will offer some insightful suggestions.
Best SIP Plan for 5 Years
While choosing the best SIP for a 5-year term, it's important to consider factors such as the fund's past performance, the fund manager's expertise, the fund house's reputation, and the scheme's fit with your risk profile. Here are a few SIPs that have consistently performed well over the past 5 years:
Best SIP Plans for 5 Years to invest (Equity)
| Fund | AUM (In Crs) | Expense Ratio | 3 Yr Return (%) | 5 Yr Return (%) | Invest Now |
|---|---|---|---|---|---|
| Motilal Oswal Midcap Direct Growth | ₹20056 Cr | 0.57 % | 33.45 % | 32.96 % | |
| Bandhan Small Cap Fund Direct Growth | ₹8716 Cr | 0.38 % | 27.48 % | Fund inception in Year 2020 | |
| Nippon India Small Cap Fund - Direct Plan - Growth Plan | ₹61027 Cr | 0.68 % | 27.1 % | 35.76 % | |
| Quant Small Cap Fund Growth Option Direct Plan | ₹26331 Cr | 0.64 % | 26.37 % | 46.53 % | |
| Tata Small Cap Fund Direct Growth | ₹9464 Cr | 0.34 % | 25.22 % | 33.71 % |
Overview of Best SIP Plans for 5 Years to invest (Equity)
 | 0.57% |
 Benchmark | S&P BSE Midcap TR INR |
 | ₹20056 Cr |
 | 24 February, 2014 |
 | ₹500/₹500 |
 Exit Load | 1.0% |
 | No Lock-in |
 TurnOver | 94.86% |
 | Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
| 0.38% |
Benchmark | S&P BSE Smallcap TR INR |
| ₹8716 Cr |
| 26 February, 2020 |
| ₹1000/₹100 |
Exit Load | 1.0% |
| No Lock-in |
TurnOver | 89.28% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
| 0.68% |
Benchmark | S&P BSE Smallcap TR INR |
| ₹61027 Cr |
| 1 January, 2013 |
| --/₹100 |
Exit Load | 1.0% |
| No Lock-in |
TurnOver | 22.08% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
| 0.64% |
Benchmark | S&P BSE Smallcap TR INR |
| ₹26331 Cr |
| 1 January, 2013 |
| ₹5000/₹1000 |
Exit Load | 1.0% |
| No Lock-in |
TurnOver | 86.77% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
| 0.34% |
Benchmark | S&P BSE Smallcap TR INR |
| ₹9464 Cr |
| 13 November, 2018 |
| --/₹100 |
Exit Load | 1.0% |
| No Lock-in |
TurnOver | 15.44% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
Best SIP Plans for 5 Years to invest (Debt)
| Fund | AUM (In Crs) | Expense Ratio | 3 Yr Return (%) | 5 Yr Return (%) | Invest Now |
|---|---|---|---|---|---|
| Aditya Birla Sun Life Dynamic Bond Fund Direct Plan Growth | ₹1697 Cr | 0.64 % | 7.62 % | 6.7 % | |
| SBI Dynamic Bond Fund Direct Growth | ₹3302 Cr | 0.62 % | 7.3 % | 7.26 % | |
| DSP Strategic Bond Fund Direct Plan Growth | ₹1717 Cr | 0.53 % | 6.88 % | 7.4 % | |
| Kotak Dynamic Bond Direct Growth | ₹2971 Cr | 0.58 % | 6.74 % | 7.41 % | |
| Bandhan Dynamic Bond Fund - Direct Plan - Growth | ₹3048 Cr | 0.71 % | 6.41 % | 7.18 % |
Overview of Best SIP Plans for 5 Years to invest (Debt)
| 0.64% |
Benchmark | CRISIL Composite Bond Fund TR INR |
| ₹1697 Cr |
| 1 January, 2013 |
| ₹1000/₹1000 |
Exit Load | 0.5% |
| No Lock-in |
TurnOver | 243.03% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
| 0.62% |
Benchmark | CRISIL Composite Bond Fund TR INR |
| ₹3302 Cr |
| 1 January, 2013 |
| ₹5000/₹500 |
Exit Load | 0.2% |
| No Lock-in |
TurnOver | 615.78% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
| 0.53% |
Benchmark | CRISIL Composite Bond Fund TR INR |
| ₹1717 Cr |
| 1 January, 2013 |
| ₹100/₹100 |
| 0% |
| No Lock-in |
TurnOver | 1279.64% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
| 0.58% |
Benchmark | CRISIL Composite Bond Fund TR INR |
| ₹2971 Cr |
| 1 January, 2013 |
| ₹100/₹100 |
| 0% |
| No Lock-in |
TurnOver | 479.57% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
| 0.71% |
Benchmark | CRISIL Composite Bond Fund TR INR |
| ₹3048 Cr |
| 1 January, 2013 |
| ₹1000/₹100 |
| 0% |
| No Lock-in |
TurnOver | 336.34% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
Best SIP Plans for 5 Years to invest (Hybrid)
| Fund | AUM (In Crs) | Expense Ratio | 3 Yr Return (%) | 5 Yr Return (%) | Invest Now |
|---|---|---|---|---|---|
| HDFC Balanced Advantage Fund Direct Plan Growth Option | ₹94866 Cr | 0.74 % | 21.32 % | 20.49 % | |
| ICICI Prudential Equity & Debt Fund Direct Plan Growth | ₹40203 Cr | 0.98 % | 18.62 % | 22.08 % | |
| Edelweiss Aggressive Hybrid Direct Plan Growth Option | ₹2195 Cr | 0.38 % | 17.81 % | 19.66 % | |
| UTI Aggressive Hybrid Fund-Growth - Direct | ₹6111 Cr | 1.24 % | 15.67 % | 19.35 % | |
| Quant Absolute Fund Growth Option Direct Plan | ₹2251 Cr | 0.7 % | 14.78 % | 24.43 % |
Overview of Best SIP Plans for 5 Years to invest(Hybrid)
| 0.74% |
Benchmark | |
| ₹94866 Cr |
| 1 January, 2013 |
| ₹100/₹100 |
Exit Load | 1.0% |
| No Lock-in |
TurnOver | 15.13% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
| 0.98% |
Benchmark | CRISIL Hybrid 35+65 - Agg TR INR |
| ₹40203 Cr |
| 1 January, 2013 |
| ₹5000/₹100 |
Exit Load | 1.0% |
| No Lock-in |
TurnOver | 53.5% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
| 0.38% |
Benchmark | CRISIL Hybrid 35+65 - Agg TR INR |
| ₹2195 Cr |
| 1 January, 2013 |
| ₹100/₹100 |
Exit Load | 1.0% |
| No Lock-in |
TurnOver | 93.41% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
| 1.24% |
Benchmark | CRISIL Hybrid 35+65 - Agg TR INR |
| ₹6111 Cr |
| 1 January, 2013 |
| ₹1000/₹500 |
Exit Load | 1.0% |
| No Lock-in |
TurnOver | 55.02% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
| 0.7% |
Benchmark | CRISIL Hybrid 35+65 - Agg TR INR |
| ₹2251 Cr |
| 1 January, 2013 |
| ₹5000/₹1000 |
Exit Load | 1.0% |
| No Lock-in |
TurnOver | 143.62% |
| Selling within 36 months, gains taxed at slab rates. |
| Holding over 3 years, gains taxed at slab rates without indexation. |
SIP for 5 Years
Investing in SIP for 5 years can be an excellent way to achieve medium-term financial goals. It allows you to take advantage of the power of compounding and rupee cost averaging, potentially leading to substantial corpus over time.
Remember, while the past performance of a fund can give you an idea about its consistency and reliability, it does not guarantee future results. Always choose a SIP plan that aligns with your financial goals and risk tolerance, and if possible, consult with a financial advisor before making your decision.
In conclusion, the best SIP plan for 5 years in India could be any one of those listed above, or others, based on your individual financial goals and risk tolerance. Always ensure to conduct thorough research and consider getting professional advice before making your decision.
How to select the right SIP for 5 years
Choosing the best SIP (Systematic Investment Plan) requires careful evaluation of various factors. Here are some key steps to help you select the most suitable SIP for your investment portfolio:
1. Identify Your Financial Goals:
The first step in selecting a SIP is to identify your financial goals. Are you investing for retirement, planning to buy a house, or saving for your child's education? The duration and the amount of money needed for these goals can help you decide the type of mutual fund to invest in.
2. Understand Your Risk Tolerance:
Different mutual funds carry different levels of risk. Equity funds, for example, can offer high returns but are more risky compared to debt funds, which offer stable but relatively lower returns. Understanding your risk tolerance will help you choose the right category of mutual funds.
3. Evaluate Fund Performance:
Look at how the mutual fund has performed over time. While past performance is not an indicator of future performance, it can give you an idea of the fund's consistency.
4. Check the Expense Ratio:
The expense ratio is the annual fee that mutual funds charge for managing your investments. A high expense ratio can eat into your returns over time. Therefore, it is advisable to opt for a fund with a lower expense ratio.
5. Review the Fund Manager's Track Record:
A good fund manager can make a significant difference to the fund's performance. Look at the fund manager's experience, his/her track record, and the performance of other funds managed by him/her.
6. Diversification:
Choose a fund that is well-diversified across sectors and companies. Diversification can help mitigate risk and stabilize returns.
7. Regularly Monitor Your SIP:
After investing, it's crucial to regularly monitor your SIP's performance and make necessary adjustments in line with your changing financial goals or market conditions.
In conclusion, choosing the best SIP is a process that requires understanding your financial goals, assessing your risk appetite, and conducting thorough research on different mutual funds. You might also consider consulting with a financial advisor to make the most informed decisions.
Frequently Asked Questions
Which SIP is the best for 5 years?
Choosing the best type of SIP for a 5-year term requires careful consideration of your financial goals and risk tolerance. For a medium-term horizon like 5 years, balanced funds or large-cap funds could be a good choice. These funds aim to provide steady growth while minimizing risk, making them suitable for a 5-year investment period. However, the best SIP plan for 5 years will differ for each investor based on their specific needs and risk appetite.
What is the average return in SIP for 5 years?
The average return on SIP investments for 5 years can vary significantly based on the type of mutual fund chosen. Equity funds, for instance, have historically given returns of 12-15% per annum over a 5-year period, whereas debt funds typically offer returns in the range of 7-9%. However, these are average figures and actual returns can vary based on market conditions and the specific performance of the chosen mutual fund.
Can we do SIP for 5 years?
Yes, you can definitely do a SIP for 5 years. In fact, a 5-year SIP can be an excellent way to achieve medium-term financial goals. It allows you to invest a fixed amount regularly, thus promoting disciplined investing, and benefits from the power of compounding and rupee cost averaging.
How much is Rs.50,000 per month SIP for 5 years?
If you invest Rs. 50,000 per month in a SIP for 5 years, the total investment would amount to Rs. 30 lakhs. Assuming an average annual return of 12%, the estimated corpus at the end of 5 years would be approximately Rs. 40.6 lakhs. This calculation is made using the formula for calculating the future value of a series of payments in a SIP.
How to get 50 lakhs in 5 years with SIP?
Achieving a corpus of 50 lakhs in 5 years with a SIP would require a substantial monthly investment and a fund that delivers high returns. Assuming an annual return rate of 12%, you would need to invest approximately Rs. 65,000 per month to reach a corpus of 50 lakhs in 5 years.
How to make 1 crore in 5 years by SIP?
Making 1 crore in 5 years through SIP would require significant monthly investment and a mutual fund that provides high returns. Assuming a rate of return of 12% per annum, you would need to invest around Rs. 1.3 lakh per month in a SIP for 5 years to accumulate a corpus of 1 crore. However, achieving such a high return in a short period of 5 years involves taking on substantial risk.
How to make 1 crore in 5 years in mutual funds?
To accumulate 1 crore in 5 years through mutual funds, you would need to make a substantial lump sum investment or a high monthly SIP investment in a fund that provides superior returns. Assuming an average annual return rate of 12%, a lump sum investment of around Rs. 55 lakhs, or a monthly SIP of approximately Rs. 1.3 lakhs would be required. However, such a target in a short period of 5 years involves high risk, and one should invest based on their risk tolerance and financial goals.