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Mutual Funds & SIP

Best SIP Plans to Invest In: How to Choose by Time Horizon

The best SIP plan is the fund category that fits your time horizon: equity for 5+ years, liquid or short-term debt for money needed within 1-2 years.

RM

Written by Rohan Mehta

Updated on 17 September 2026·6 min read

On this page8 sections
Credsir Mutual Funds & SIP guide cover with a trending up icon

The best SIP plan to invest in is the one whose fund category fits how long you can stay invested: equity funds for goals five years or more away, and liquid or short-term debt funds for money you need within a year or two. No single scheme is best for everyone.

Key facts

Item Position in September 2026
SIP inflow ₹32,297 crore in August 2026 (AMFI)
SIP accounts 1,075.32 lakh outstanding; 1,001.79 lakh made a contribution in August 2026
SIP assets ₹18,61,652 crore in August 2026
Minimum SIP Can be as low as ₹500 a month, or ₹250 under Chhoti SIP
Rulebook SEBI (Mutual Funds) Regulations, 2026, in force from 1 April 2026
Scheme categories Revised by SEBI circular of 26 February 2026
Equity fund tax, tax year 2026-27 20% on gains within 12 months; 12.5% above ₹1.25 lakh after 12 months

Which SIP is best for your time horizon

People search for the best SIP for 1, 3, 5 or 15 years because the holding period matters more than the fund name. Equity prices can fall sharply in a single year, so a short goal and an equity SIP are a poor match.

How long you will stay invested Fund categories to look at Why
Up to 1 year Liquid funds and other short-term debt funds Liquid funds hold debt and money market securities maturing within 91 days, so prices move less
1 to 3 years Short-term debt funds; hybrid funds with a small equity share Limits the damage if equity markets fall just before you need the money
3 to 5 years Hybrid funds or large cap funds Large cap funds must keep at least 80% in the 100 biggest companies
5 years and more Index funds, large cap, flexi cap and multi cap funds Enough time to ride out a bad year or two
7 to 15 years or more Add mid cap or small cap funds as a smaller part Higher swings; each must keep at least 65% in mid or small companies
A fixed target year Life cycle funds, such as “Life Cycle Fund 2045” A pre-set mix moves away from equity as the year gets closer

If you pay tax under the old regime, an ELSS (tax saver) SIP also counts for deduction, but each instalment is locked in for three years from its own date. Our best SIP plans page compares SIP routes with current minimum amounts.

How to compare SIP plans inside a category

  1. Check the riskometer on the factsheet. It has six levels, from Low to Very High.
  2. Compare returns with the scheme’s benchmark and its category over five years or more, not just the last year.
  3. Look at the expense ratio. A direct plan costs less than a regular plan of the same scheme because no distributor commission comes out of it.
  4. Read the exit load and any lock-in in the Scheme Information Document.
  5. Check that a new fund does not hold mostly the same stocks as funds you already own.
  6. Run your monthly amount through the SIP calculator at a few different return rates. Treat the result as an illustration, not a forecast.

What “high return SIP” lists leave out

Tables ranking SIPs by one-year or three-year return reward funds that happened to hold the right stocks in that period. Mid cap and small cap funds top these lists in rising markets and fall hardest in falling ones. Credsir does not publish a ranked list of schemes for this reason. Our mutual fund screener lets you filter schemes on your own terms.

What changed for SIP investors in 2026

ItemDetails
New regulations.SEBI notified the Mutual Funds Regulations, 2026 on 14 January 2026. They replaced the 1996 regulations from 1 April 2026.
Cost cap.The base expense ratio now excludes statutory levies and transaction costs. For an open-ended equity scheme, it is capped at 2.10% on the first ₹500 crore of assets and falls as the scheme grows. Index funds and ETFs are capped at 0.90%.
Retirement and children’s funds closed.SEBI discontinued the solution-oriented category on 26 February 2026. These schemes stopped taking fresh money and will be merged, so an SIP in one of them will not continue as before.
Life cycle funds added.They run for 5 to 30 years and charge an exit load of 3%, 2% or 1% in the first three years.

How to start a SIP

  1. Complete your KYC with PAN and an accepted identity and address proof such as Aadhaar.
  2. Choose where to invest: the fund house’s website or app, a registered platform, or a registered distributor.
  3. Pick the direct plan to invest on your own, or the regular plan if a distributor advises you.
  4. Select the growth or IDCW (income distribution) option and add a nominee.
  5. Set the amount, date and frequency, and register an auto-debit mandate from your bank account.
  6. Track your SIPs through the consolidated account statement (CAS) sent to your email.

Chhoti SIP for first-time investors

Chhoti SIP lets a first-time mutual fund investor start with ₹250 a month. Fund houses that offer it set conditions: at least 60 monthly instalments, the growth option only, and payment through NACH or UPI AutoPay. Check the scheme page of the fund house before you sign up.

How SIP gains are taxed

Each SIP instalment is a separate purchase, so its holding period is counted from its own date. From 1 April 2026, gains are taxed under the Income-tax Act, 2025.

Fund type Held 12 months or less Held more than 12 months
Equity-oriented (at least 65% in listed Indian shares) 20% 12.5% on gains above ₹1.25 lakh a year
Specified debt funds bought on or after 1 April 2023 Your slab rate Your slab rate

Our page on mutual fund taxation covers hybrid and other funds. For advice on specific schemes, a SEBI-registered investment adviser charges you a fee instead of earning commission.

Frequently asked questions

Which SIP is best in India?

No SIP is best for everyone. Pick the category that suits your goal and time horizon, then compare schemes in it on expense ratio, riskometer and returns against the benchmark over five years or more.

Which is the best SIP plan for 5 years?

For five years, investors usually look at index, large cap, flexi cap or hybrid funds rather than small cap funds. Equity can still be below cost after five years, so keep a buffer.

Which is the best SIP plan for 1 year?

For money needed within a year, liquid funds and other short-term debt funds are the usual choice. An equity SIP over one year can end in a loss.

What is a good SIP to invest in now?

A SIP spreads your purchases over time, so the start date matters less than staying invested. Choose the fund on your goal and horizon, not on recent market moves.

Is a high return SIP safe?

Funds showing the highest recent returns are usually mid cap, small cap or sector funds, which carry a Very High riskometer level. Past returns do not guarantee future returns.

What is the minimum amount to start a SIP?

AMFI says a SIP can be as small as ₹500 a month, and ₹250 a month under Chhoti SIP. Each scheme sets its own minimum.

Can I stop or change a SIP?

Yes. You can cancel a SIP through the fund house, registrar or platform where you started it, and start a new one with a different amount.

Sources

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