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SIP Plans To Invest Rs. 5000 Monthly

SIPs let you invest incrementally and allow you to take advantage of compounding when done over the long term. They are flexible, have low entry costs, can be automated, and can be stopped at any time. You can easily start investing with an SIP of ₹5000 per month.

SIP is a payment mode you can opt for when investing in mutual funds. They are incredibly popular with both new and seasoned investors for their flexibility and low barrier to entry, with most SIPs needing as little as ₹500 per month. 
 

So, if you have an excess of ₹5,000 in your savings account at the end of each month after attending to the essentials, consider investing it. For starters, SIPs and investment plans are a good place to begin.

This blog explains the best SIPs for ₹5,000 per month to help you start your investment journey. Read on!

Best SIPs for ₹5,000 Per Month
 

  • Regular SIP

    This is the most common and popular type of SIP. Regular SIPs let you contribute a fixed amount of money each month at a particular date. The amount you invest stays fixed, letting you ride out market ups and downs.

    The basic idea here is to enable you to accumulate a large corpus with small regular investments.

    Most investment platforms and apps allow you to automate this process to electronically transfer funds from your bank account to your SIP account. It is a hassle-free process that does not need active management once set up.

  • Top-Up/Step-Up SIP

    This SIP allows you to increase your SIP amount at regular intervals. For example, you can start an SIP of ₹5,000 per month and ask your fund manager to increase the SIP by ₹2,000 every 12 months.
     

    Top-up SIPs are great if you are a salaried individual and get annual raises and bonuses. You can gradually increase your investments as your salary increases, resulting in a higher corpus.
     

  • Flexible SIP

    You can change your SIP amount as per your requirements. So you can invest more when prices and down and less when they are up. You can also alter your investment amount according to your financial circumstances.

    Note that you must inform your fund house of the SIP contribution change at least one week before the next due date of your SIP.
     

  • Trigger SIP

    Trigger SIPs let you time your investments based on certain market conditions like a predetermined NAV level, specific index levels or a favourable market condition. The SIP can be triggered in two ways: Price trigger or time trigger.

    • In a price trigger, you set a price for the mutual fund, and when the fund reaches your stated price, an SIP contribution is made.

      For example, if you set the price trigger as ₹2,000, an SIP contribution will be made if the NAV of the fund hits ₹2,000 or falls below it.
       

    • In a time trigger, you set a specific time for investment. For exmaple, you can set a trigger for when there is a market correction of more than 10%.
       

  • This SIP is better suited for experienced investors with market knowledge, as it requires technical analysis and a good understanding of market trends.

  • Perpetual SIP

    Unlike most SIPs that require you to state a tenure – usually 3 or 5 years, perpetual SIPs do not have an end date. Any SIP where you do not have to state a maturity date is considered a perpetual SIP.

    These are great as they let you take advantage of long-term compounding, so with a minimal SIP of ₹5,000 per month, you can hope to build a considerable corpus over time.

    The SIP contribution will continue until you request the fund house to stop them. You can also sell/redeem your funds at any time.

  • Multi SIP

    This lets you invest in multiple schemes under one fund house. So, with an SIP of ₹5,000 per month, investing in a multi-SIP with four schemes will automatically allot ₹1,250 to each scheme under the fund house. This method lets you diversify your investment portfolio.
     

  • SIP with Insurance

    These SIP schemes provided by fund houses offer a free, optional life over. The cost of the insurance here will be borne by the fund house. You also do not need a medical screening and insurance coverage starts when your SIP commences.

What Type of Fund Should I Pick for a Monthly ₹5,000 Investment Plan?

  • Equity Funds by Market Cap: Equity mutual funds invest a minimum of 65% of their funds in stocks/company shares. Large-cap funds are great for risk-averse investors; small-cap funds offer comparatively higher returns at a higher risk, and mid-cap funds lie in between.

    For more details on equity-based investing, read our blog on How To Invest ₹10,000 In India For High Returns.

  • Tax* Saving Funds: ELSS funds are the only mutual funds are offer tax* deductions of ₹1.5 lakhs in annual investments. However, the profit/return is taxed as capital gains like other mutual funds. They are also equity-based investments.

  • Debt Funds: These are low-risk investments that offer lower interest rates than equity funds in exchange for sustained returns. We recommend you split your SIPs into debt and equity to generate decent returns.

Conclusion

SIPs are an effective way to remain disciplined in turbulent markets. They are also easily accessible since many do not have high minimum investments, and you can easily begin investing with an SIP of ₹5,000 per month.

Although ₹5000 may not seem like much, with steady contributions over the long term, you will be surprised to find how much profit you can accrue!

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

View all posts by Tata AIA Life Insurance

Frequently Asked Questions

Will a monthly ₹5,000 investment plan give me high returns?

This will heavily depend on the fund you invest in, how long you plan to invest, and current/future market2 conditions.

Splitting your SIPs between debt and equity funds or investing in one or two good fund houses should give you good returns over the long term. Hence, do your research before making any investments.

What is a market correction?

A market correction is when the price/rate of an index, stock, currency market or any other security drops by more than 10% (but less than 20%) from its most recent peak.

They are an indicator of a healthy market since persistent price increases and upwards trends in stocks can lead to high levels of inflation. The drop is considered a “correction” and returns prices to their long-term trend. A correction usually lasts three to four months.

Disclaimers

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • Tax: *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
  • 2Market-linked returns are subject to market risks and terms & conditions of the product. The assumed rate of returns or illustrated amount may not be guaranteed and depends on market fluctuations.