Why SIP is India's favourite investment vehicle

SIP has democratised wealth creation in India. You can start with ₹500/month. No need to time the market. No lump sum required. And the evidence is clear: disciplined SIP investors who stayed through market cycles have done well over 10–15 year periods.

Fund categories explained

  • Large cap: Top 100 companies by market cap. Lower risk, more stable returns (~10–12% historical).
  • Mid cap: Companies ranked 101–250. Higher risk, potentially higher returns (~13–15% historical).
  • Small cap: Companies ranked 251+. Highest risk and volatility, but historically highest long-term returns.
  • Flexi cap: Fund manager chooses across large/mid/small. Good for most investors.
  • Index funds: Track Nifty 50 or Sensex. Low cost (~0.1% expense ratio), no fund manager risk.

Direct vs regular plan

Always choose direct plan — same fund, no distributor commission, 0.5–1% lower expense ratio. Over 20 years, this 0.5% difference adds up to lakhs.

ELSS for tax savings

Equity Linked Savings Schemes (ELSS) qualify for ₹1.5 lakh deduction under Section 80C (old regime). With only a 3-year lock-in (shortest among 80C options) and equity growth potential, ELSS SIPs combine tax saving with wealth creation.