A systematic investment plan, or SIP, is a popular method for making regular, fixed-amount investments in any fund or scheme. This strategy ensures that the cost of investment evens out over time by investing across market stages, whether bullish or bearish. If you're seeking the best SIP plan for a 5-year period, consider investing through the Kotak Mutual Funds platform. With Kotak's systematic investment plans, you can discover optimal options to invest your money and generate wealth over time.
Benefits of Investing SIP Plan for 5 Years
Here are some of the benefits offered by Systematic Investment Plans -
- By promoting consistent savings, it fosters financial discipline.
- It offers rupee cost averaging, which lets investors purchase more at a discount to market prices and less at a premium.
- SIPs also provide investors convenience and flexibility, allowing them to start small and raise their investment over time.
- Starting a systematic investment plan (SIP) is generally a smart move because it can help develop long-term wealth-building potential and disciplined investing habits.
Unlike traditional fixed-income products, investments in mutual funds do not guarantee a return. However, equity fund investments have historically outperformed conventional fixed-income products in terms of long-term returns. They are preferable to short-term investments in some cases. That being said, there are market risks associated with investing in the best sip plan for 5 years. Before investing, you are urged to read all scheme-related documentation thoroughly.
Top SIP Plans for 5 Years
One of the greatest ways to invest money and get started with mutual funds is through the Kotak Mahindra Bank SIP plans for 5 years.
Equity Funds for 5 Years
| Scheme Name | 1 years returns | 3 years returns |
|---|---|---|
| Canara Robeco Bluechip Equity Fund | 13.97% | 18.45% |
| Franklin India Focused Equity Fund | 16.88% | 30.23% |
| ICICI Prudential Focused Equity Fund | 19.56% | 24.87% |
Debt Funds for 5 Years
| Scheme Name | 1 years returns | 3 years returns |
|---|---|---|
| Aditya Birla Sun Life Banking & PSU Debt Fund | 6.50% | - |
| Kotak Banking and PSU Debt Fund | 6.41% | - |
Equity Funds vs. Debt Funds for 5 years
| Particulars | Equity Funds | Debt Funds |
|---|---|---|
| Investments | Company shares that are exchanged on the stock market are renowned for producing higher returns than debt-based funds or term deposits. | Invest in fixed-income assets, such as government securities, corporate bonds, treasury bills, commercial papers, and a variety of other money market instruments. |
| Risks Involved | A somewhat high to strong willingness to take risks. | Low to moderate willingness to take risks |
| Returns | Low risks involved. | High risks involved. |
Best SIP Plans for 3 and 5 Years in Equity Funds
| Scheme Name | 1 years returns | 3 years returns | 5 years returns |
|---|---|---|---|
| Canara Robeco Bluechip Equity Fund | 13.97% | 18.45% | 16.04% |
| Edelweiss Focused Equity Fund | 16.98% | - | - |
| Kotak Emerging Equity Fund | 18.53% | 30.25% | 21.73% |
Factors to Consider Before Choosing a SIP Plan for 5 Years
Consider your risk appetite: Make decisions and start investing based on your risk appetite. It’s important to seek the advice of a financial expert before investing.
Know your financial goals: Before starting your investment in this plan, have a clear objective. Whether it's to purchase a house or pay for your schooling.
- Look for liquidity: When investing in money in mutual funds, liquidity is crucial. Verify the fund's redemption procedure and exit load to guarantee easy and rapid access to your money.
- Analyse the fund’s past performance: It is important to conduct your own research and start investing after analysing the fund’s performance in the past.
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SIP Calculator for 5 Years Calculation
The mutual fund sip calculator demonstrates how a modest monthly contribution can help you accumulate a corpus over an extended period of time. Systematic investments have shown to be a reliable financial strategy over time.
SIP Calculator Formula
P*((1+i)^n)-1)/i)*(1+i) = A.
Here,
A - The sum that you will get
p - SIP total
I, or the compounded rate of return - is the percentage of return that occurs annually.
Amount of months- (n)
| Monthly investment | Expected return rate (p.a) | Time period |
|---|---|---|
| 25,000 | 12% | 5 years |
| Total invested amount | Estimated returns | Total value |
|---|---|---|
| ₹ 15,00,000 | ₹5,62,159 | ₹20,62,159 |
Frequently Asked Questions (FAQs)
Q: What is the minimum investment for a 5-year SIP?
The minimum investment starts from ₹500 to ₹1000 per month.
Q: Can I switch SIP plans before the completion of 5 years?
Yes, you can switch the SIP plans before the completion of 5 years.
Q: Are there penalties for withdrawing from a SIP before 5 years?
No, there are usually no penalties levied on withdrawing from a SIP before 5 years.
Q: Which SIP is best for 5 years?
Some of the best SIPs for 5 years include Kotak Emerging Equity Fund, Edelweiss Focused Equity Fund, Canara Robeco Bluechip Equity Fund and more.
