A Systematic Investment Plan (SIP) allows investors to invest small amounts regularly in mutual funds to build wealth over time. SIPs help in rupee-cost averaging and investing discipline. Banks, NBFCs, and mutual fund houses offer SIP services to customers. But which bank offers the best SIP plans in India? Let’s find out.
Features of a Good SIP Plan
Before looking at the top banks for SIPs, let’s understand what makes a good SIP plan:
Flexible Investment Amount and Frequency
A good SIP allows investing even small amounts like Rs 500 per month. For example, HDFC Bank’s InstaInvest SIP starts at just Rs 500 monthly installment. It also allows flexibility in choosing daily, weekly, monthly, or quarterly investment frequency as per investor’s needs. ICICI Bank SIP plans allow tenure from 1 year and investment amount from as low as Rs 100.
Wide Fund Selection
A strong line-up of funds across categories like equity, debt, and hybrid is essential. Top fund houses like ICICI, HDFC, Axis, etc. should be available. For instance, HDFC Bank offers over 500+ funds to choose from and ICICI has tie-ups with leading AMCs for wide fund choice.
Low Minimum Investment Term
An ideal SIP has a low minimum tenure of 1 year only. Long lock-ins of 3-5 years should be avoided. SBI and Axis Bank SIPs have a minimum term of just 1 year.
Low Minimum Installment Amount
The lower the minimum investment per installment, the better. Rs 500-1000 per month is considered good. Kotak Mahindra Bank SIP plans start at just Rs 1000 per month.
Digital Investment Platform
A bank should provide an easy-to-use digital platform for starting, tracking, and managing SIPs online. ICICI iMobile App and HDFC Netbanking provide seamless SIP investment platforms.
Low Charges
A good SIP plan does not levy account opening, renewal, or closure charges. The expense ratio of funds should also be low. HDFC, ICICI, SBI and Axis SIPs have zero account opening or renewal fees.
Top Banks for SIP Investment in India
Let’s look at the major banks providing SIP services:
HDFC Bank
HDFC offers InstaInvest SIP that allows starting with just Rs 500 per installment. It has over 500+ funds and charges no account opening or renewal fees. HDFC SIPs can be managed easily through NetBanking and MobileBanking.
ICICI Bank
ICICI has the iMobile app that makes SIP investments simple. Their SIP plans allow tenure from 1 year and investment amount from Rs 100. No account opening or closure charges. ICICI also has the widest range of funds from top AMCs.
SBI
SBI SIP offers investment in 200+ funds starting Rs 500 per month. One can use YONO SBI or OnlineSBI to start, renew, and track SIPs conveniently. No paperwork needed with the auto-debit facility.
Axis Bank
Axis eSIP facility allows paperless SIP registration through Netbanking, Mobile App, and website in over 300 funds. The minimum investment is only Rs 1000 per month with no lock-in.
Kotak Mahindra Bank
Kotak SIPs offer flexibility of weekly, monthly, and quarterly installments, starting Rs 1000. Zero account opening and renewal charges are levied. The 811 account facilitates seamless SIP investments.
IDFC First Bank
IDFC First has the FASTag app, which allows investing in SIPs from leading AMCs. Top funds across categories can be chosen based on one’s goals and risk appetite. No paperwork or signatures required.
Parameters for Comparing Bank SIPs
Now that we have seen the major banks providing SIP facility, let us compare them on key parameters to choose the best one for SIP investment:
Returns and Performance
SBI, ICICI, HDFC, and Axis have the widest choice of top-performing funds from leading AMCs. The returns generated would depend on the funds chosen and their historical performance.
Flexibility
HDFC, ICICI and Axis offer the most flexibility in tenure, investment dates, and amounts under SIP. For example, HDFC starts with just Rs 500 per month while ICICI allows investing from Rs 100 per month.
Fees and Charges
Most leading banks don’t levy account opening, renewal or closure charges for SIP. HDFC, ICICI, SBI and Axis have zero fees making them economical.
Digital Investing Platform
ICICI iMobile App and HDFC Netbanking provide the most user-friendly digital platforms for managing SIP investments seamlessly without paperwork.
AMC Tie-ups
HDFC and ICICI have the maximum number of AMC tie-ups offering wide fund choice across categories and risk profiles from leading fund houses.
Brand Trust
SBI, ICICI, HDFC and Axis enjoy very high brand trust being leading nationalized and private sector banks in India. This gives comfort to investors.
Conclusion – HDFC and ICICI Emerge the Best
HDFC Bank and ICICI Bank emerge as the best banks for SIP investment in India based on the parameters above. They offer unbeatable flexibility, zero charges, wide fund choice from top AMCs, and very convenient digital investing platforms. For hassle-free SIP investment and potentially higher returns, HDFC Bank and ICICI Bank are the top recommendations. Investors are advised to also consider their risk appetite, investment goals and time horizon before choosing the right SIP plans.
In summary, for an ideal combination of low investment amounts, flexible tenure, wide fund choices and a seamless digital investment platform, HDFC and ICICI Bank stand out as the top banks for SIP investment in India.