Best SIP Investment Plans for 3 Years

For a 3-year investment horizon, selecting the best SIP plans can help you maximise returns while minimising risk. These plans typically focus on debt and balanced funds, which offer stability and moderate growth. As an investor, you should consider factors like fund performance, risk profile, and expense ratio when choosing a SIP plan. This guide will explore the best SIP investment plans for 3 years and help you make informed decisions to meet your financial objectives effectively. ...read more

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What are SIP Plans?

An SIP or Systematic Investment Plan is a strategic way to invest in mutual funds. It means you dedicatedly invest a fixed amount at regular intervals — monthly or quarterly. This amount, usually predetermined, is automatically debited from your bank account and invested in the mutual fund scheme of your choice. 

You can invest via SIP for any number of years. However, in this write-up, we will narrow down to a specific tenure and discuss the type of best SIP plans for 3 years. 

Types of Best SIPs for 3 Years

Listed below are mutual funds to invest via SIP for 3 years —

Debt Mutual Funds

You can invest in short-duration debt funds via SIP investment plans for 3 years. These funds invest in debt securities and money market instruments with a duration of 3 to 4 years, making them a preferred choice for conservative investors with a four-year investment horizon. 

These funds have a longer maturity compared to overnight, liquid, and short-duration funds, but shorter than medium to long-duration funds. They are ideal for those aiming to meet financial goals within around three years. The average returns for these funds typically range from 7% to 9%.

Hybrid Mutual Funds

Hybrid mutual funds are ideal for investing via the best SIP investment plan for 3 years. Most of these funds have a lock-in period varying from 3 to 5 years. 

Hybrid mutual funds invest your money in bonds and stocks. They enable portfolio diversification, helping you navigate market volatility and earn comparatively stable profits. The equity aspect, meanwhile, brings the potential for higher returns. 

Short-term Exchange Traded Funds (ETFs)

Another mutual fund you can invest in via an SIP plan for 3 years is a short-term exchange-traded fund. 

Exchange-traded funds (ETFs) are a mix of various investments like bonds, stocks, and money market instruments that usually follow an underlying asset. ETFs combine the benefits of both mutual funds and stocks. 

They pool money from investors to offer diversified investments across different asset classes such as stocks, commodities, bonds, and currencies. Unlike mutual funds, ETFs can be traded on stock exchanges like regular stocks, offering flexibility and liquidity to investors.

ELSS Mutual Funds

This type of equity mutual fund allows you to invest via SIP for 3 years. 

Equity-linked Savings Scheme (ELSS) mutual funds have a mandatory lock-in period of 3 years. A minimum of 80% of the total investible corpus is invested in equity and equity-related securities. The funds are diversified across different market capitalisations, sectors, and themes. 

There is no maximum investment tenure but a lock-in period. After you complete 3 years of the lock-in period, you can withdraw the entire amount. The product is invested across an assorted group of companies varying from small-cap to large-cap and spread across various sectors. 

Investment Plan

How to Invest in SIP for 3 Years?

To invest via an SIP plan for 3 years and get the best returns without much risk, take note of the following — 

  • Investment Objectives – Determine your investment objectives like income generation, appreciation of capital, or a combination of two. 
  • Risk Tolerance – Are you ready to handle the market volatility when you invest in mutual funds via an SIP plan for 3 years? Consider your risk appetite when selecting a mutual fund. 
  • Expense Ratio – Take the fund’s expense ratio into factor when selecting an SIP plan for 3 years. This ratio impacts the overall returns in the long term. 
  • Fund Performance – You should evaluate the fund’s past performance, at least for the last 3-5 years. However, keep in mind that the past performance does not assure future results. 

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