Best SIP Mutual Fund for 5 Years: Returns, Features, Risks & FAQs
A Systematic Investment Plan (SIP) is one of the most popular ways to invest in mutual funds in India. It allows investors to contribute a fixed amount at regular intervals, usually monthly. This article provides an overview of some of the best SIP plans for 5 years. It will also cover their features, potential advantages, associated risks, and taxation aspects.
Top SIP Plans for 5 Years
The following table highlights some of the best-performing SIP in the last 5 years, based on their 5-year CAGR.
| Mutual Fund Plans | AUM (Rs. in cr.) | Expense Ratio (%) | CAGR 5Y (%) | NAV | Volatility (%) | Alpha | Exit Load (%) |
|---|---|---|---|---|---|---|---|
| Quant Small Cap Fund | 29,629.09 | 0.71 | 36.8 | 272.99 | 18.05 | 5.15 | 1 |
| Motilal Oswal Midcap Fund | 33,608.53 | 0.7 | 35.13 | 119.71 | 18.48 | 8.6 | 1 |
| ICICI Pru Infrastructure Fund | 8,042.75 | 1.14 | 34.85 | 208.04 | 15.68 | 8.58 | 1 |
| Quant Infrastructure Fund | 3,428.94 | 0.65 | 34.8 | 40.03 | 19.37 | 1.28 | 0.5 |
| Nippon India Small Cap Fund | 65,922.00 | 0.64 | 33.68 | 57.84 | 20.4 | 9.4 | 0.5 |
| Bandhan Infrastructure Fund | 1,675.88 | 0.84 | 33.59 | 187.8 | 17.86 | 7.22 | 1 |
| HDFC Infrastructure Fund | 2,539.90 | 1.08 | 33.01 | 51.82 | 16.06 | 8.12 | 1 |
| Bandhan Small Cap Fund | 14,062.19 | 0.4 | 32.9 | 160.75 | 16.33 | 4.45 | 1 |
| Franklin Build India Fund | 2,950.12 | 0.95 | 32.79 | 338.82 | 17.18 | 7.64 | 1 |
| DSP India T.I.G.E.R Fund | 5,405.54 | 0.73 | 32.73 | 50.09 | 19.34 | 12.07 | 1 |
Disclaimer: Please note that the above list of the best SIP plan for 5 years is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Mutual Fund Screener and is subject to real-time updates.
Note: The data on the list of the best SIP investment plan for 5 years is from 2nd September, 2025. This data is derived from the Tickertape Mutual Funds Screener.
- Plan: Growth
- 5Y CAGR: Sorted from Highest to Lowest
- SIP Investment: Allowed
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Overview of the Best SIP for 5 Years
Quant Small Cap Fund
Quant Small Cap Fund invests in emerging businesses with growth potential. It focuses on small-cap companies that are often under-researched but capable of delivering strong performance.
Motilal Oswal Midcap Fund
Motilal Oswal Midcap Fund invests in medium-sized companies with established track records. It seeks to benefit from businesses that are scaling operations and expanding market share.
ICICI Prudential Infrastructure Fund
ICICI Prudential Infrastructure Fund focuses on companies driving India’s infrastructure growth. It invests across sectors like construction, power, transport, and telecom.
Quant Infrastructure Fund
Quant Infrastructure Fund targets companies connected to India’s infrastructure growth story. The fund follows an active approach to capture value from structural reforms and long-term development projects.
Nippon India Small Cap Fund
Nippon India Small Cap Fund invests in smaller businesses with strong growth potential. The fund explores under-researched segments of the market, aiming to capture long-term wealth creation opportunities.
Bandhan Infrastructure Fund
Bandhan Infrastructure Fund focuses on companies involved in infrastructure and related industries. It invests in areas such as energy, construction, transportation, and telecommunications.
HDFC Infrastructure Fund
HDFC Infrastructure Fund invests in businesses shaping India’s infrastructure sector. It covers industries like energy, power, construction, and telecom.
Bandhan Small Cap Fund
Bandhan Small Cap Fund invests in smaller companies with growth potential. It focuses on under-researched businesses that can expand significantly over time.
Franklin Build India Fund
Franklin Build India Fund invests in companies that contribute to infrastructure development. The fund seeks to benefit from India’s industrial growth and the government’s focus on long-term infrastructure projects.
DSP India T.I.G.E.R Fund
DSP India T.I.G.E.R Fund invests in companies driving growth through infrastructure and reforms. Its portfolio includes sectors like transportation, construction, energy, and capital goods.
What is a SIP for 5 Years?
A SIP for 5 years means investing a fixed amount, for example, ₹500, in a mutual fund at regular intervals (weekly, monthly, or quarterly) for five years. However, investors can also update or increase the SIP amount over time if needed. In a 5-year SIP plan, money stays invested for a medium-term period. The SIP returns in 5 years depend on the type of fund. Some funds may give higher returns but carry more risk, while others may focus on stability. This approach also gives the benefit of rupee cost averaging (buying more when prices are low and less when prices are high) and the power of compounding.
Taxation on SIP for 5 Years
When you invest through a 5-year SIP plan, your units are held long enough to qualify for long-term capital gains (LTCG) taxation. The Union Budget 2024 introduced new rules for different types of mutual funds:
Tax on Equity Mutual Funds
| Capital Gains Type | Holding Period | Tax Rate (Budget 2024) |
| Long-Term Capital Gains (LTCG) | More than 12 months | 12.5% flat; gains up to ₹1.25 lakh per year are tax-free |
How to Invest in the Best SIP Plan for 5 Years?
You can easily start to invest in the best SIP plan for 5 years by following these steps:
- To invest in the best SIP for 5 years, you can visit an equity investment platform such as smallcase
- The next step is to research and identify the best SIP for 5 years that matches your financial goals. Tools like the Tickertape Mutual Fund Screener can help you filter and compare funds based on parameters such as returns, expense ratio, and fund size.
- Once you shortlist the funds, visit smallcase, log in, and search for the fund by name. You can then choose the investment mode, either a one-time lump sum or a 5-year SIP plan, and complete the process.
Advantages of Investing in the Best SIP for 5 Years
- Disciplined Savings Habit: By investing monthly for 5 years consistently, you automatically set aside money for the future, helping you develop a disciplined approach to wealth creation.
- Risk Reduction through Averaging: Regular investments spread across five years reduce the impact of market ups and downs. This averaging process helps lower the risk of entering at a high market point. However, the returns depend on fund performance and market conditions.
- Compounding Benefits: Even small investments can potentially grow when left invested. Over five years, compounding may increase returns as gains start earning more gains. However, the growth depends on fund performance and market conditions.
- Flexibility and Control: A SIP for 5 years allows you to modify, pause, or increase contributions. This flexibility enables you to adapt to changing financial needs without interrupting your investment journey.
Risks of Investing in SIP for 5 Years
- Market Fluctuations: SIPs are linked to market performance. In a 5-year period, sudden corrections or prolonged downturns can reduce returns even of the best SIP for 5 years.
- Limited Time Horizon: Five years may not always be enough for equity investments to recover from downturns. A shorter horizon increases the chance of lower returns if markets perform poorly during this period.
- Tax Liability: Even after five years, SIP gains are taxable under long-term capital gains rules. This taxation can reduce the effective take-home return from a mutual fund investment plan.
- Uncertain Returns: SIPs aim to create wealth over time, but outcomes can vary. Market cycles, fund strategies, and economic conditions influence results, which means a 5-year SIP may deliver different returns than expected.
Factors to Consider Before Investing in SIP for 5 Years
- Risk Appetite: Different categories of funds bring different levels of risk. To find the best SIP for 5 years, it’s essential for investors to understand the risk factors associated with various types of funds and adjust their investment strategy accordingly.
- Fund Costs: When exploring the best SIP to invest for 5 years, investors need to consider expense ratios and exit loads as they vary across schemes and directly affect net returns. Even small differences in cost can influence outcomes in a 5-year SIP plan, especially over a long investment journey.
- Tax Implications: Gains after five years are taxed under long-term capital gains rules. Investors need to stay updated with the latest tax implications for equity, debt, and hybrid funds, as this impacts the effective returns from a SIP plan.
- Market Trends: The market moves in cycles, and a 5-year SIP will experience both highs and lows. Understanding the trend helps investors set realistic expectations and helps them review the best SIP to invest for 5 years.
Who should Invest in a SIP for 5 Years?
- Medium-Term Goal Planners: A 5-year SIP often matches investors aiming for medium-term goals, where the timeline is neither too short nor too long.
- Goal-Oriented Investors: Certain financial milestones often fall within a five-year horizon. In such cases, SIPs may align with these specific objectives, while still allowing exposure to market growth.
- Investors Seeking Structure: Regular contributions through SIPs provide a disciplined framework. A 5-year period may appeal to those who value consistency and want a defined investment window.
- Balanced Risk Takers: Some investors may prefer balancing growth with caution. A 5-year SIP plan can expose them to equities while still keeping the horizon manageable compared to very long-term commitments.
Conclusion
A SIP for 5 years offers a structured way to invest regularly toward medium-term goals. It brings benefits like disciplined saving, the potential of compounding, and rupee cost averaging, while also carrying risks linked to market fluctuations and fund performance.
Investors need to stay updated on fund performance, track expense ratios, and analyse market conditions that influence SIP returns in 5 years. By understanding these aspects, it becomes easier to set realistic expectations and plan accordingly.
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Frequently Asked Questions on SIP for 5 Years
A SIP for 5 years means investing a fixed amount in a mutual fund every month for five years. It is a medium-term investment approach that allows disciplined savings and potential market-linked returns.
The average SIP return in 5 years depends on the fund category. Equity funds may deliver higher but volatile returns, while hybrid or debt funds may provide more stable outcomes.
After 5 years, SIP investments qualify as long-term. Equity fund gains above ₹1.25 lakh are taxed at 12.5%, while debt and hybrid funds are taxed at 12.5% without indexation.
Yes, SIPs are flexible. Investors can pause or stop contributions anytime, though doing so may reduce the benefits of compounding and rupee cost averaging.
There is no single “best” SIP plan for 5 years for all investors. Performance varies across categories like large-cap, mid-cap, small-cap, or hybrid funds, influenced by factors such as market conditions, government policies, sectoral growth, and fund management strategies. The right choice for the best SIP plan for 5 years depends on individual goals, risk tolerance, and investment horizon.
The investment amount varies from person to person. Since SIPs allow small contributions, investors can choose amounts based on their budget and financial planning needs.
Yes, investors can switch from one SIP plan to another before completing five years. However, switching may affect the final SIP 5 year return, as each fund has different performance patterns, costs, and risk factors.
A SIP for 5 years is generally seen as a medium-term commitment. While it may help meet certain goals, long-term investing often requires horizons longer than five years. The suitability depends on category, market cycles, and individual planning.
The minimum investment in a 5-year SIP plan depends on the fund house. Many mutual fund investment plans allow starting with as little as ₹500 per month, making SIPs accessible to a wide range of investors.
To find the best SIP mutual fund for 5 years, investors can use tools like the Tickertape Mutual Fund Screener. It allows investors to check funds that delivered high returns in the last five years. However, since past performance does not guarantee future results, it is important to conduct thorough research before selecting a fund.
