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How to choose the best SIP investment?

3 Mins 21 Jun 2022 0 COMMENT


Tiny droplets of water make up a mighty ocean. Similarly, one can create wealth by consistently making small investment decisions. Mutual funds are well-known to provide superior returns in the long run that can help in wealth creation. Not everyone has the financial bandwidth or prowess to invest large sums of money at once.

If you want to invest in mutual funds, consider using the Systematic Investment Plan (SIP) route. When you make SIP mutual fund investments, you invest a fixed sum regularly in a mutual fund of your choice. You choose an investment horizon that is comfortable for you to invest in. SIP investments help you develop a disciplined approach to investing while assisting you in building a corpus for the long term.

Additional read: Know How to Invest in SIP and its Importance

Why choose Systematic Investment Plans?

1. You don’t need a lot of money to invest in Systematic Investment Plans. You can start a SIP with as little as Rs. 100 a month 

2. You benefit from the power of compounding. The returns that you earn on your investment give you more returns 

3. It is a way to develop a consistent and disciplined investment habit 

4. SIPs are easy to invest in. You can automate your SIP investments every month

How to choose the right SIP mutual fund to invest in?

Choosing the right mutual fund to start your SIP investment takes some work. Follow these steps to identify the best SIP mutual fund for you:

1. Identify your goal

Before you select a mutual fund for making an investment, analyse your goals. Are you planning to save for a vacation, down payment of a house, or retirement? Depending on your goal, you should make an estimate of the money you would need to accomplish your goals. Then, you can draw a conclusion on your investment amount every month and the returns you can expect on the money invested. 

2. Choose the kind of fund you want to invest in

SIP mutual funds can be equity funds, debt funds, multi-cap funds, and even liquid funds. Depending on your investment goal and investment horizon, you need to narrow down on the kind of fund you want to invest in. For instance, if you have a short-term goal, you may consider investing in a liquid or a debt fund. Equity mutual funds are better suited to long-term investments. 

3. Compare different funds

Once you have decided the kind of fund you want to start a SIP, make a list of all the top contenders. Ensure that they meet your list of requirements. Compare their historical performance, fund objective, fund manager history, expense ratio, and other relevant parameters. This will help you find the best SIP mutual fund that matches your goals. 

4. Consult your financial advisor

If you find it hard to decide which mutual fund you want to start a SIP with, talking to your financial advisor could be helpful. The financial advisor will analyse and help you identify a mutual fund that will work for you.

Additional read: Light Up your Portfolio with SIP


Systematic Investment Plans can be a great way to save for the future. These plans help you inculcate a disciplined investment habit. However, like any other investment, choosing the right SIP mutual fund should involve a lot of research. Understand your own needs and go for the one which is best suited for you.

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