Best SIP Plans for 500 per Month

What are SIP Plans?

A SIP, or Systematic Investment Plan is a way to invest in market-linked funds in small and fixed amounts regularly—often monthly. These funds are offered by the mutual fund houses through the best mutual fund schemes in India. The insurance companies allow you to invest in the SIP plans under Unit Linked Insurance Plans (ULIPs), Annuity Plans, or Child Plans.

SIP investment helps you build wealth over time with the benefit of rupee-cost averaging, which reduces the impact of market ups and downs. SIPs are flexible; you can start with small amounts, increase contributions, or even pause them if needed. They are a convenient way to grow your savings and reach financial goals.

NOTE:

The ULIP funds offer the best SIP plans starting with a minimum amount of Rs. 1,000 per month. These plans provide you with high returns through market-linked investments along with a life cover for the financial security of your family. 

List of Best SIP Plans for 500 per Month in India in 2024

The best SIPs to invest Rs. 500 per month in India, allow you to start investing regularly and benefit from the principle of compounding and rupee-cost averaging. 

The following list is sorted as per the top-performing SIP for Rs. 500 per month for 5 years:

*NAV as of 25 April 2024

Details of Some of the Best SIP Plans for 500 per Month

1. Invesco India PSU Equity Fund Direct-Growth Plan

   Invesco India PSU Equity Fund Direct-Growth Plan is a mutual fund scheme offered by Invesco Mutual Fund. It is an equity fund that invests primarily in Public Sector Companies (PSUs) in India.

   Features of Invesco India PSU Equity Fund Direct-Growth Plan:

   • Investment Objective: To generate capital appreciation by investing in equity and equity-related instruments of companies where the Central/State Government(s) has a majority shareholding or management control or has powers to appoint a majority of directors.

   • Lock-in Period: None

   • Age of Fund: 11 years, 3 months (since January 1, 2013)

   • Benchmark Index: S&P BSE PSU TRI

   • Minimum Investment: ₹500 for SIP; ₹1000 for lump-sum

   • Risk Level: Very High

   • Short-term Capital Gains (STCG): 15% tax if you sell within 1 year

   • Long-term Capital Gains (LTCG): 10% tax on gains exceeding ₹1 lakh per financial year after 1 year.

2. Nippon India Index Fund S&P BSE Sensex Plan Direct-Growth Plan

   Nippon India Index Fund S&P BSE Sensex Plan Direct-Growth Plan is a passively managed index fund offered by Nippon India Mutual Fund. It tracks the performance of the S&P BSE Sensex, which is a benchmark index of the Indian stock market.

   Features of Nippon India Index Fund S&P BSE Sensex Plan Direct-Growth Plan:

   • Investment Objective: Replicate the composition of the Sensex, with the aim of generating returns that are commensurate with the performance of the Sensex.

   • Lock-in Period: None

   • Fund Age: 11 years, 3 months (since January 1, 2013)

   • Benchmark Index: S&P BSE Sensex TRI

   • Minimum Investment: ₹500 for SIP; ₹5000 for lump-sum

   • Risk Level: Very High

   • Short-term Capital Gains (STCG): 15% tax on profits if you sell within 1 year

   • Long-term Capital Gains (LTCG): 10% tax on profits exceeding ₹1 lakh in a financial year if held for over 1 year.

3. Franklin India Feeder Franklin US Opportunities Direct Fund-Growth Plan

   The Franklin India Feeder Franklin US Opportunities Direct Fund-Growth Plan is a mutual fund scheme offered by Franklin Templeton Mutual Fund that invests in the Franklin US Opportunities Fund, a US-based equity fund. It is a feeder fund, which means it invests in another fund rather than directly in stocks.

   Features of Franklin India Feeder Franklin US Opportunities Fund Direct-Growth Plan:

   • Investment Objective: To invest in equity and equity-related instruments of companies in the US which have the potential for capital appreciation

   • Lock-in Period: None

   • Fund Age: 11 years, 3 months (as of January 1, 2013)

   • Benchmark Index: Russell 3000 Growth

   • Minimum Investment for SIP: ₹500

   • Risk Level: Very High

   • Short-term Capital Gains (STCG): Taxed at 15% if you sell within 1 year

   • Long-term Capital Gains (LTCG): 10% tax on gains exceeding ₹1 lakh per financial year if you hold for over 1 year.

4. SBI Technology Opportunities Fund Direct-Growth Plan

   The SBI Technology Opportunities Fund Direct-Growth Plan is a mutual fund scheme offered by SBI Mutual Fund. It is an equity scheme that invests in a diversified portfolio of equity and equity-related securities of companies in the technology and technology-related sectors.

   Features of SBI Technology Opportunities Fund Direct-Growth Plan:

   • Investment Objective: Aims to provide long-term capital appreciation by investing in technology and technology-related companies.

   • Lock-in Period: None

   • Fund Age: 11 years, 3 months (since January 1, 2013)

   • Benchmark Index: S&P BSE Teck TRI

   • Minimum Investment: ₹500 for SIP; ₹5000 for lump-sum

   • Risk Level: Very High

   • Short-term Capital Gains (STCG): 15% tax if sold within 1 year

   • Long-term Capital Gains (LTCG): 10% tax on returns over ₹1 lakh per financial year after 1 year.

5. UTI Value Fund Direct-Growth Plan

   UTI Value Fund Direct-Growth Plan is a value-oriented equity mutual fund scheme offered by UTI Mutual Fund. It invests predominantly in equity and equity-related securities of companies across the market capitalization spectrum. 

   Features of UTI Value Fund Direct-Growth Plan:

   • Investment Objective: To generate long-term capital appreciation by investing in undervalued stocks that the fund manager believes have the potential for future growth.

   • Lock-in Period: None

   • Fund Age: 11 years, 3 months (since January 1, 2013)

   • Benchmark Index: NIFTY 500 TRI

   • Minimum Investment: ₹500 for SIP; ₹5000 for lump-sum

   • Risk Level: Very High

   • Short-term Capital Gains (STCG): 15% tax on gains if sold within 1 year

   • Long-term Capital Gains (LTCG): 10% tax on gains above ₹1 lakh in a financial year after 1 year of holding

Factors to Consider Before Investing in Best SIP Plans for 500 per Month

Some important factors to consider before choosing the best SIP Plan for 500-per-month contributions in India are listed below:

1. Risk Tolerance:

   • This is how comfortable you are with the possibility of losing money on your investment. 

   • Equity SIPs offer potentially higher returns but come with more risk of short-term fluctuations. 

   • Debt SIPs are generally considered less risky but also offer lower returns.

2. Investment Goals:

   • Plan your investments as per your financial goals. 

   • A short-term goal (within 3 years), like a down payment on a gadget, might be better suited for a debt SIP investment. 

   • Long-term goals (5 years or more) like retirement could benefit from an equity SIP investment for potentially higher growth.

3. Investment Horizon:

   • Enquire for how long you want to stay invested in the best SIP Plan, as SIPs are meant for long-term investing. 

   • The longer the investment horizon, the more time you ride out market fluctuations and benefit from potential compounding returns in equity SIPs.

4. Expense Ratio:

   • This is a fee charged by the insurance company or mutual fund house to manage the SIP. 

   • Lower expense ratios mean more of your money goes towards investment.

5. Fund Performance:

   • Look at the fund's past performance, but remember past performance does not guarantee future results. 

   • Look for funds with a consistent track record of performing well compared to their benchmark index.

   • Make use of a SIP calculator to estimate your returns from the investments in the best SIP for 500 per month.

In Conclusion

Investing in the best SIP plans for Rs. 500 per month can be a great start to building long-term wealth. Look for SIP investments with low expense ratios and a proven track record of performance. Consider diversifying across different types of funds, such as equity, debt, or hybrid funds, based on your risk tolerance and financial goals. While the amount may seem modest, the discipline of regular investing can yield significant returns over time due to the power of compounding.