Explore the best SIP plans for Rs 1000 per month for 5-10 years. Find top-performing options to grow your investment with minimal risk and maximize your returns.
Investing in mutual funds through a Systematic Investment Plan (SIP) is a disciplined approach to wealth creation. With SIPs, investors can contribute a fixed amount regularly, which could be as low as Rs. 1000 per month. This method not only instils a habit of regular savings but also benefits from the power of compounding over time. In 2024, there are several SIP plans that stand out for their performance and reliability.
This approach is particularly beneficial for those who may not have large sums to invest upfront but wish to participate in the investment landscape as it also teaches you 3 major concepts like-
- Disciplined Savings: SIPs instil a sense of financial discipline. By automating the investment process, investors are less likely to skip contributions, ensuring that they save regularly. This habit, over time, can lead to substantial wealth accumulation.
- Rupee Cost Averaging: One of the key advantages of SIPs is rupee cost averaging. Since the investment amount is fixed, more units of a mutual fund are purchased when prices are low, and fewer units are bought when prices are high. This strategy helps in reducing the average cost of investment over time and mitigates the risk associated with market volatility.
- Power of Compounding: The true essence of SIPs lies in the power of compounding. When returns on investments are reinvested, they generate additional earnings. Over time, this reinvestment results in exponential growth of the investment body.
- Performance and reliability: As of 2024, several SIP plans have distinguished themselves based on performance and reliability. These plans have been curated to cater to various investment horizons and risk appetites, ensuring that there is something for every type of investor. The best options for those starting with Rs. 1000 per month are those that offer a blend of stability, growth potential, and have stood the test of market fluctuations.
However, below we are going to tell you some of the current options available for investors looking to start with a modest sum of Rs. 1000 per month.
3 Top SIP Plans for Rs. 1000 per Month
For the investors who are searching for short-term gains-
Invesco India PSU Equity Funds:
- Subcategory: Thematic Fund – This fund falls under the thematic category, meaning it invests in stocks of public sector undertakings (PSUs) where the government has a majority stake. It aims to capitalize on the growth and performance of these companies.
- Assets Under Management (AUM): The AUM represents the total market value of the investments managed by the fund. A higher AUM can indicate investor confidence and scale, which can lead to better diversification and potentially lower costs due to economies of scale.
- 1-Year Return: This impressive one-year return signifies the fund’s performance over the past year. It reflects the fund’s ability to capitalize on market opportunities and generate substantial returns for its investors.
- Expense Ratio: The expense ratio is the annual fee that the fund charges for managing the investments. It is deducted from the fund’s assets and affects the overall returns. An expense ratio of 1.06% is considered reasonable for thematic funds.
- Minimum SIP: The fund allows investors to start a SIP with a minimum amount of Rs. 500, making it accessible for investors with limited funds to start investing and potentially build wealth over time.
For the investors who are searching for long-term gains-
ICICI Pru Overnight Fund:
- Sub Category: It falls under the ‘Overnight Fund’ category, which means it invests in bonds that mature in just one day. These funds are known for their low risk and high liquidity, making them suitable for parking funds that you may need access to at short notice.
- Assets Under Management (AUM): As of the latest data, the AUM is approximately Rs. 9,870 Crores. This is a bit lower than the figure you mentioned, which could be due to the fluctuating market values and net inflow or outflows from the fund.
- 3-Year CAGR: Overnight funds typically offer returns slightly higher than savings accounts, and the annualized returns for this fund over the past year have been around 6.73%. The CAGR over three years would be expected to be in a similar range, not as high as 126.16%.
- Expense Ratio: The expense ratio, which is the annual fee that the fund charges for managing the assets, is indeed low at 0.10% for the direct plan of the fund. This is beneficial for investors as lower expenses translate to higher net returns.
- Minimum SIP: The minimum amount required to start a Systematic Investment Plan (SIP) with this fund is Rs. 500, which makes it accessible for small investors to start investing.
For the investors who are searching for gains via peer-to peer-lending –
Monexo India:
- Platform: Monexo is an RBI approved P2P lending platform in India. It connects borrowers seeking personal loans with investors looking to invest and earn returns.
- Expected Returns: Investors can expect returns of up to 13% per annum. This is higher compared to traditional fixed deposits, making it an attractive option for those seeking better yields.
- Minimum Investment: The platform allows you to start investing with a minimum amount of Rs. 1,000, which is quite accessible and enables investors to diversify their portfolio with a relatively small initial investment.
Features:
- High Returns: The potential to earn up to double the returns of fixed deposits.
- Monthly Passive Income: Investors receive monthly repayments from borrowers, which include both principal and interest, contributing to a steady income stream.
- Auto-Invest Options: Monexo offers an auto-investment feature that automatically allocates funds to loans based on the investor’s predefined criteria, simplifying the investment process.
- Suitability: This platform is particularly suitable for investors who are looking for higher returns than what is typically available from traditional investment avenues like mutual funds. It’s also ideal for those interested in diversifying their investment portfolio into a new asset class.
What to look Before Investing in SIP?
When choosing a SIP, investors should consider various factors such as the fund’s performance history, expense ratio, fund manager’s track record, and the fund’s investment philosophy. It’s also important to align the choice of SIP with one’s financial goals, investment horizon, and risk appetite.
Though, starting an SIP with Rs. 1000 per month is a shrewd and economical way to enter the world of investments. The key is to remain invested for the long term and choose funds that align with your investment goals and risk profile. With the right strategy, even small investments can grow into a significant amount.
