Investing has become a very important part of modern life. People today understand that only saving money in a bank is not enough. If you want to grow your wealth, you need to invest wisely. One of the best and easiest investment options for beginners and working professionals is SIP – Systematic Investment Plan in mutual funds.
If you want to know the best mutual fund to invest, best mutual funds in India, best mutual funds for SIP, best mutual funds for 2026, and which are the best mutual funds providing good returns in the last 3 to 5 years, this complete guide will help you choose the right options.
Let’s begin.
What is SIP and Why is It the Best Way to Invest?
SIP means investing a fixed amount every month in a mutual fund. It is the easiest method because:
- You don’t need a large amount to start
- You invest regularly without stressing
- You benefit from rupee-cost averaging
- You enjoy compounding
- Perfect for long-term wealth creation
Many experts say:
“SIP is not timing the market, it is the discipline of investing regularly that builds wealth.” – A common opinion shared by many mutual fund advisors and finance educators.
This is why SIP is the best mutual fund to invest today, especially if you want long-term results.
Why 2026 Is a Good Year to Start SIP
2026 is considered a good year to begin or increase your SIP because:
- India’s economy is growing strongly
- Many sectors like banking, IT, infrastructure, energy, and manufacturing are expanding
- Stock market participation is increasing
- Long-term economic indicators look stable
- Mutual funds have shown strong 3-year and 5-year performance
This means choosing the best mutual fund for long term and continuing SIP can give strong results in the future.
Read Also: List of Trading Holidays of NSE Market in 2026
How We Selected the Best Mutual Funds for SIP in 2026
To keep things simple and beginner-friendly, We followed this approach:
1. 5-Year Performance Analysis
Funds that performed well consistently over the last 5 years.
2. 3-Year Stability Check
Funds that delivered stable performance in the last 3 years.
3. Risk Level Assessment
Funds suitable for conservative, moderate, and aggressive investors.
4. Expert Opinion Considered
Mutual fund analysts and financial educators often suggest focusing on long-term, diversified funds.
5. Future Growth Potential
Funds with strong portfolio quality and solid fund management.
Best Mutual Funds for SIP in 2026 (Based on 3–5 Year Performance)
Below you’ll find a fully explained list. These funds are from popular and trusted fund companies, but mentioned without links, only for information.
1. Quant Small Cap Fund
Why is it one of the best mutual funds?
This fund has delivered excellent returns in the last 5 years. It invests in small companies with very high growth potential. Many experts say small cap funds are good for long-term investors who can handle market ups and downs.
Who should invest?
- High-risk takers
- Long-term investors (7+ years)
- People wanting very high growth
Expert opinion
“Small cap funds can create massive wealth, but only for patient investors.” – A common view among financial advisors.
2. Motilal Oswal Mid Cap Fund
Why is it recommended?
Mid cap companies generally grow faster than large cap companies. This fund has shown strong 3-year and 5-year growth.
Who should invest?
- Moderate to high-risk investors
- People targeting higher growth
- Long-term SIP investors
Expert opinion
“Mid cap funds balance growth and risk better than small cap funds, making them suitable for most long-term investors.”
3. Motilal Oswal Large & Mid Cap Fund
Why is it among the best mutual funds to invest today?
This fund invests in both strong large companies and growing mid-sized companies. This creates a balanced portfolio.
Who should invest?
- Medium-risk investors
- Investors wanting stable and growing companies
- Long-term SIP users
Expert opinion
“Experts often say that large + mid combination provides the right mix for long-term performance without too much risk.”
4. Parag Parikh Flexi Cap Fund
Why is it popular?
It is one of the most stable and respected funds in the market. It invests in Indian and global companies, giving diversification.
Who should invest?
- Safe long-term investors
- Beginners
- People wanting stable yet good growth
Expert opinion
“Many financial mentors recommend this fund as a “core SIP fund” for building wealth steadily.”
5. ICICI Prudential Large Cap Fund
Why choose this?
Large cap funds invest in big companies that are stable and less risky. This fund has offered consistent returns in 3 and 5 years.
Best for:
- Low-risk investors
- Beginners
- Long-term wealth builders
Expert opinion
“Large cap funds are perfect for steady growth and capital protection.”
6. HDFC Top 100 Fund
Why it’s a top pick for 2026?
This fund invests in the top 100 large companies of India. It has shown strong returns over the last 5 years.
Who should invest?
- Medium to low-risk investors
- Long-term SIP investors
- People who want stability
7. Bandhan Small Cap Fund
Why included?
This fund has performed exceptionally well in recent years. It is high risk, but the return potential is very strong.
Who should invest?
- Aggressive investors
- People planning SIP for more than 7–10 years
Expert opinion
“Small cap funds can multiply wealth but require patience.”
8. Franklin India Balanced Advantage Fund
Why recommended?
This fund automatically adjusts between equity and debt, depending on market conditions. This makes it safe for beginners.
Best for:
- Low-risk investors
- First-time to start SIP users
- People looking for stability and low volatility
Expert opinion
“Balanced funds are ideal during unpredictable markets.”
Read Also: How to Start Investing in the Stock Market for Beginners
Which Fund Type Should You Choose in 2026?
| Low Risk | Medium Risk | High Risk |
|---|---|---|
| Large Cap funds | Flexi Cap | Mid Cap |
| Balanced Advantage funds | Large & Mid Cap | Small Cap |
Make Your Own Perfect SIP Portfolio for 2026
| Portfolio Type | Allocation |
|---|---|
| Beginner Portfolio (Safe) |
60% Large Cap 40% Balanced Advantage |
| Moderate Portfolio |
40% Flexi Cap 30% Large Cap 30% Mid Cap |
| Aggressive Portfolio |
40% Flexi Cap 30% Mid Cap 30% Small Cap |
Why 3-Year and 5-Year Performance Matters
When checking best mutual fund to invest, many people look only at 1-year return, which is a big mistake.
The real picture comes from:
- 3-year returns → Shows stability
- 5-year returns → Shows long-term strength
If a fund is performing well in both periods, it is a reliable long-term SIP option.
Read Also: How to Start a SIP with Just Rs 500 and Grow Wealth Faster
Common Mistakes to Avoid in SIP
Many people make mistakes that reduce their returns. Here are the most important ones:
| Negative Action | Correct Action |
|---|---|
| Stopping SIP when the market falls | This is the best time because you buy more units. |
| Choosing too many funds | Stick to 2–4 funds only. |
| Expecting fast returns | SIP is slow but powerful. |
| Not staying invested long enough | Wealth grows after 5+ years. |
| Checking portfolio every week | Review only once a year. |
Expert Advice for SIP in 2026
Most financial educators share similar opinions:
- Stay invested for long-term: 7 to 10 years is ideal.
- Don’t panic during market corrections: Down markets are best for SIP.
- Choose funds with strong management: A good fund manager matters more than short-term returns.
- Increase SIP every year: A small increase boosts overall wealth.
- Diversify: Don’t invest all money in one category.
Should You Start SIP Now or Wait?
Almost every expert says:
“The best time to start SIP was yesterday. The second best time is today.”
So start now. Waiting is the biggest financial mistake.
FAQs (Frequently Asked Questions)
1. Which is the best mutual fund for SIP in 2026?
There is no single best fund, but top categories include Flexi Cap, Large Cap, Mid Cap, Small Cap, and Balanced Advantage.
2. How many mutual funds should I invest in?
2 to 4 funds are enough for a strong portfolio.
3. Can I stop SIP anytime?
Yes, SIP is flexible. You can change, pause, or increase your SIP whenever you want.
4. Are small cap funds risky?
Yes, they are high risk. But they give high returns in long-term.
5. How long should I continue my SIP?
Minimum 5 years, but 7–10 years is ideal.
6. Can I invest lumpsum in these funds?
Yes, but SIP is safer because it spreads your investment over time.
Disclaimer: This article is for educational purposes only. It is not financial advice or a recommendation to buy any specific fund. Mutual funds are subject to market risks. Always check facts and take advice from a registered financial advisor before investing.