A Systematic Investment Plan (SIP) is the ideal investment mode for long term investment in mutual funds. By investing a small amount regularly, you can benefit from the effects of compounding and rupee cost averaging in the long term which lets you create a substantial corpus for your financial goals. That is why you should consider SIPs for long term goals of 10 to 20 years, like building an adequate fund for retirement or buying a house.
Keep scrolling for the 10 best SIP plans for 20 years to create wealth for your long-term life goals.
10 Best SIP Plans for 20 Years in India
Here are a few of the best SIP mutual funds for 20-year investments and their five-year annualised returns.
| Best SIP Plans | 5-Year Returns |
| Franklin India Feeder-Franklin US Opportunities Fund | 12.18% |
| HDFC Money Market Fund | 6.12% |
| Axis Focus 25 Fund | 7.25% |
| Canara Robeco Emerging Equities Fund | 10.88% |
| Invesco India Liquid Fund | 5.18% |
| Kotak Liquid Fund | 5.16% |
| PGIM Global Equal Opportunities Fund | 14.29% |
| ICICI Corporate Bond Fund | 6.96% |
| Mirae Asset Large Cap Fund | 11.00% |
| IDFC Banking & Debt PSU Fund | 7.18% |
Also Read
10 Best SIP Plan for 10 years India in 2023 – Returns and Performance
10 Best SIP Plans for 1000 Per Month in India 2023
Detailed Overview of the Best SIP Plans for 20 Years
Following is a comprehensive overview of the 10 best SIP plans to invest in for 20 years:
1. Franklin India Feeder-Franklin US Opportunities Fund
This mutual fund scheme allows an individual to invest in stocks of US companies via the Franklin US Opportunities Fund. As a long term investment scheme, it helps investors to save for their retirement, overseas asset diversification and long-term wealth creation. With 13.88% annualised returns since inception, it is one of the best SIP plans for 20 years.
- AUM : ₹2880.45 Crore
- NAV: ₹45.42
- Expense Ratio: 1.61%
- Minimum SIP Investment: ₹500
- Category of Fund: Fund of funds
- Risk: Very high
- Annualised Returns 1 Year: -12.71%
- Annualized Returns 3 Year: -12.57%
- Annualised Returns 5 Year: 12.18%
2. HDFC Money Market Fund
This scheme aims to generate capital for investors by investing in money market instruments. As a long-term investment scheme, there is a certain degree of risk involved here. However, investors with low-risk appetites can invest here to grow their wealth and save for the future. Priya Ranjan and Vikash Agarwal are the current fund managers of this scheme.
- AUM: ₹145176.33 Crore
- NAV: ₹4846.94
- Expense Ratio: 0.41%
- Minimum SIP Investment: ₹100
- Category of Fund: Money market fund
- Risk: Moderate
- Annualised Returns 1 Year: 5.54%
- Annualised Returns 3 Year: 5.08%
- Annualised Returns 5 Year: 6.12%
3. Axis Focus 25 Fund
This scheme aims to invest in equity and equity-related instruments of 25 companies to generate long-term returns. By investing in this scheme for a comprehensive period, say 20 years, investors can reap the benefits of long-term wealth appreciation and savings for future events like children’s education, marriage and retirement. Vinayak Jainath and Jinesh Gopani are the current fund managers of this scheme.
- AUM : ₹15139.75 Crore
- NAV: ₹36.72
- Expense Ratio: 1.83%
- Minimum SIP Investment: ₹100
- Category of Fund: Focussed fund
- Risk: Very high
- Annualised Returns 1 Year: -15.72%
- Annualised Returns 3 Year: 18.60%
- Annualised Returns 5 Year: 7.25%
4. Canara Robeco Emerging Equities Fund
This fund invests in equities and equity-related instruments of large and mid-cap companies to generate capital appreciation. Thus, they offer substantial returns in the long run as one of the best SIP mutual funds for 20 years. Shridatta Bhandwaldar is the current fund manager of this scheme.
- AUM: ₹15261.98 Crore
- NAV: ₹155.54
- Expense Ratio: 1.77%
- Minimum SIP Investment: ₹1,000
- Category of Fund: Large and mid-cap funds
- Risk: Very high
- Annualised Returns 1 Year: -2.48%
- Annualised Returns 3 Year: 29.78%
- Annualised Returns 5 Year: 10.88%
5. Invesco India Liquid Fund
This mutual fund aims for capital growth by investing in a diversified portfolio of debt and money market instruments. The fund carries low to moderate levels of risk and high liquidity making it ideal for conservative investors or those looking to park their money for the short term. The assets these funds invest in have a Macaulay duration of up to 91 days. Krishna Cheemalapati is the present fund manager of this fund.
- AUM : ₹6434.58 Crore
- NAV: ₹3071
- Expense Ratio: 0.22%
- Minimum SIP Investment: ₹500
- Category of Fund: Liquid fund
- Risk: Low to moderate
- Annualised Returns 1 Year: 5.67%
- Annualised Returns 3 Year: 4.17%
- Annualised Returns 5 Year: 5.18%
6. Kotak Liquid Fund
This mutual fund scheme invests in debt securities and related instruments to offer steady returns and high liquidity. Its portfolio comprises several sovereign securities, money market instruments and corporate bonds. The debt securities that this liquid fund invests in have different maturities for risk mitigation. Since its inception on January 1, 2013, it has delivered 6.73% annualised returns.
- AUM: ₹0.0 Crore
- NAV: ₹4521.18
- Expense Ratio: 0.32%
- Minimum SIP Investment: ₹100
- Category of Fund: Liquid fund
- Risk: Moderate
- Annualised Returns 1 Year: 5.61%
- Annualised Returns 3 Year: 4.14%
- Annualised Returns 5 Year: 5.16%
7. PGIM Global Equal Opportunities Fund
This mutual fund scheme primarily focuses on capital growth by investing in a diversified portfolio of overseas stocks. It invests most of its assets in the PGIM Jennison Global Equity Opportunities Fund. However, it would be advisable for investors to have a high-risk appetite and an advanced knowledge of the stock market to invest in this fund. Rahul Jagwani is the present fund manager of this mutual fund scheme.
- AUM: ₹ 1336.46 Crore
- NAV: ₹29.26
- Expense Ratio: 2.45%
- Minimum SIP Investment: ₹1,000
- Category of Fund: Fund of funds
- Risk: Very high
- Annualised Returns 1 Year: -8.97%
- Annualised Returns 3 Year: 15.81%
- Annualised Returns 5 Year: 14.29%
8. ICICI Corporate Bond Fund
This scheme aims to generate wealth by investing in AA+ and other top-rated corporate bonds for liquidity and security. This investment scheme is suitable for moderate to low-risk-appetite investors. Investors looking for both long-term and short-term savings can invest here to earn substantial and regular returns. Anuj Tagra, Chandni Gupta, and Rahul Goswami are the current fund managers of this scheme.
- AUM: ₹16998.0 Crore
- NAV: ₹24.98
- Expense Ratio: 0.53%
- Minimum SIP Investment: ₹1,000
- Category of Fund: Corporate bond fund
- Risk: Low to moderate
- Annualised Returns 1 Year: 5.56%
- Annualised Returns 3 Year: 6.29%
- Annualised Returns 5 Year: 6.96%
9. Mirae Asset Large Cap Fund
This scheme invests more than 80% of its funds into the assets of large-cap companies. Also, a minimum of 20% investment is done in mid-cap companies. It aims to bring in high returns by focusing on long term investments in the top companies across sectors and themes. Gaurav Misra and Gaurav Khandelwal are the present fund managers of this scheme.
- AUM: ₹32910.58 Crore
- NAV: ₹76.95
- Expense Ratio: 1.58%
- Minimum SIP Investment: ₹1,000
- Category of Fund: Large cap fund
- Risk: Very high
- Annualised Returns 1 Year: -1.60%
- Annualised Returns 3 Year: 28.05%
- Annualised Returns 5 Year: 11.00%
10. IDFC Banking & Debt PSU Fund
This best SIP plan for 20 years primarily invests in money market and debt instruments in the banking, PFI and PSU sectors. This debt scheme is comparatively less riskier than its equity counterparts, and is suitable for conservative investors. Suyash Chaudhury and Gautam Kaul are the present fund managers of this scheme.
- AUM: ₹14281.11 crore
- NAV: ₹20.89
- Expense Ratio: 0.62%
- Minimum SIP Investment: ₹1,000
- Category of Fund: Banking and PSU fund
- Risk: Low to moderate
- Annualised Returns 1 Year: 4.35%
- Annualised Returns 3 Year: 5.64%
- Annualised Returns 5 Year: 7.18%
Final Word
To conclude, you must remember that long term SIP investments also carry low to very high levels of market risks. Therefore, you must be aware of your risk appetite and invest in an appropriate mix of mutual funds among other asset classes in line with your financial goals. If you are considering starting your long-term SIP investments in 2023, you may consider schemes that could help you meet your goals in time. However, don’t hesitate to consult a certified and neutral financial advisor if you’re unable to strategize your investments on your own.
Now that we have introduced you to the best SIP plans for 20 years, here’s an idea. If you want to get a taste of SIPs firsthand, you could consider investing in Navi Mutual Fund, starting at just ₹10.
Disclaimer: Mutual fund investments are subject to market risks, read all scheme-related documents carefully.
FAQs
Can I have a SIP for 20 years?
Yes, you can invest in mutual funds via the SIP mode for 20 years. This may help you earn very long term returns as per the find performance.
Are long term SIPs risky?
It is important to note that SIP or lump sums are modes of investment for mutual funds. Furthermore, mutual funds are directly subject to market risks. However, investing in a top-rated mutual fund for the long-term via the SIP mode may help in mitigating the short-term market risks and generate higher risk-adjusted returns in the long term due to compounding and rupee cost averaging benefit.
Are SIPs taxable?
The tax on SIP returns depends on the nature of the underlying asset class and the holding period of the investment. For equity funds with a holding period of less than 1 year, a 15% short-term capital gains (STCG) tax on returns apply in the year of redemption. Returns up to ₹1 lakh are tax-free for equity funds with a holding period of more than 1 year, and a 10% long-term capital gains (LTCG) tax applies on returns above ₹1 lakh. For debt funds, returns on investments of less than 3 years are taxed as per the applicable slab rate for the investor, and returns on investments of more than 3 years attract a 20% LTCG tax with indexation benefit. Note, all tax rates are exclusive of applicable cess or surcharges.
What is meant by the NAV of a mutual fund?
The net asset value (NAV) is the unit denomination of a mutual fund scheme that changes on a daily basis. The NAV is calculated by dividing the total market value of the securities of a fund by the total number of units of the scheme on a given day.
Are SIPs covered under Section 80C?
An SIP is not a particular type of a mutual fund but only a way to invest in a mutual fund involving fixed and periodical investment installments (most popularly on a monthly basis). Equity Linked Savings Schemes (ELSS), with a lock-in period of 3 years, is the only mutual fund category that offers tax deduction benefits of up to ₹1.5 lakh under Section 80C of the I-T Act. Thus, an investor could enjoy 80C tax benefits through an SIP into an ELSS fund.
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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Certainly! The article covers various aspects related to Systematic Investment Plans (SIPs) and specific mutual funds suitable for long-term investments ranging from 10 to 20 years. Here's an analysis of the concepts embedded in the piece:
SIP (Systematic Investment Plan)
SIPs involve investing a fixed amount regularly in mutual funds, aiding in long-term wealth creation. Benefits include leveraging the power of compounding and rupee-cost averaging.
Compounding
Refers to the ability of an asset to generate earnings, which are then reinvested to generate their earnings. Over time, this leads to exponential growth of the initial investment.
Rupee Cost Averaging
A strategy where an investor puts a fixed amount regularly into an investment, buying more units when prices are low and fewer units when prices are high. This strategy aims to reduce the average cost per unit over time.
Mutual Funds
Investment vehicles that pool money from multiple investors to invest in securities like stocks, bonds, etc. Mutual funds are managed by professional fund managers.
Asset Classes
Different types of investments such as equities, debt securities, money market instruments, etc., each with varying risk levels and potential returns.
Annualised Returns
Reflects the average annual performance of an investment over a specific period. It's a crucial metric for evaluating a fund's performance.
NAV (Net Asset Value)
Represents the per-unit market value of a mutual fund on a given day. It's calculated by dividing the total value of the fund's assets by the number of outstanding units.
Risk Appetite
Refers to an individual's willingness to take risks with their investments based on their financial situation, goals, and comfort level with market fluctuations.
Taxation on Mutual Funds
The taxation on mutual funds varies based on the type of fund, holding period, and the nature of returns (short-term or long-term capital gains).
ELSS (Equity Linked Savings Schemes)
A type of mutual fund with a lock-in period of 3 years, offering tax benefits under Section 80C of the Income Tax Act.
Financial Advisor
An expert who provides guidance on financial planning, investment strategies, and asset allocation based on an individual's financial goals and risk profile.
Market Risks
Mutual fund investments are subject to market risks, including volatility and the potential for losses based on market fluctuations.
Asset Allocation
The distribution of investments across different asset classes to achieve a balance between risk and return based on an individual's goals and risk tolerance.
Portfolio Management
The process of selecting and managing a mix of investments in a way that aligns with an investor's objectives and risk tolerance.
Investment Disclaimer
Mutual fund investments come with risks, and investors should read all scheme-related documents carefully before investing.
Navi Mutual Fund
An investment opportunity that allows individuals to invest with a minimum amount, potentially offering a taste of SIPs.
This article provides a comprehensive overview of SIPs, mutual funds, and various considerations essential for long-term investment planning in the Indian context.
