You know what’s wild? I used to think mutual funds were just… boring. Like, something only serious people in suits talked about while sipping black coffee in glass offices. I didn’t even know what a fund was. I mean — how can money grow if you’re not doing anything with it daily? I thought you had to be glued to stock charts, sweating over every dip like it’s a medical emergency.
But then, something clicked.
Not like a lightbulb moment — more like a slow, awkward “wait a second…” when I looked at a friend’s portfolio. This guy — let’s call him Ravi — started SIPs ten years ago. Just ₹500 a month. Nothing fancy. And now? He’s sitting on over ₹1.2 lakh. And I’m sitting there, broke, holding a coffee that cost ₹180, wondering where my salary even goes.
So yeah. That’s when I got curious. I started Googling stuff like best mutual funds for long term investment in India, but everything felt too clean. Like, too… polished? I didn’t want advice from some grey-haired CEO or a guy using words like “diversification strategy.” I just wanted to know:
If I invest a little now, will it be worth anything in 2035?
Turns out — yeah. Because long-term mutual funds aren’t just for retirement. They’re for people like us who want to stop worrying about rent forever. You let compounding do its slow magic. It’s not exciting. Honestly, it’s boring. But boring gets rich.
And now that I’m knee-deep into this, I keep stumbling on terms like “wealth creation,” “growth funds,” “value vs growth,” and “10-year CAGR” like they’re Pokémon evolutions. It’s overwhelming at first. But you’ll get it.
Anyway. If you’re like me — just trying to make smart money moves without losing sleep — stick around. Let’s figure this out together.
This ain’t expert advice. This is just me, after a few mistakes, telling you what I wish someone told me back then.
2. Why Mutual Funds for Long-Term Investing?
Okay so listen—
I didn’t get mutual funds for the longest time. Like, everyone kept talking about SIPs and compounding and “wealth creation” and I was just there nodding like yeah cool sounds adult. But really? I had zero clue.
You know what finally clicked?
One night—post dinner, brain half-dead—I opened my ICICI Direct app (big mistake before bed) and saw this random chart that showed how ₹1,000/month could turn into like ₹6 lakhs in 20 years. And I just stared. Like, what??? That’s just one Domino’s pizza a week I’m not eating.
Anyway. That was my wake-up call.
I started digging. Like, properly. Reading everything from YouTube rants to Reddit threads. Most of it was noise, but this one dude said something that stuck—“SIPs are like gym memberships for your money. You won’t see abs tomorrow, but skip it for a year? You’ll feel it.”
That hit. Because I’d just quit my gym too. So, yeah.
SIP vs Lump Sum — What Even Is the Difference?
If you’re like me and overthink every rupee, SIP (Systematic Investment Plan) makes way more sense. It’s like, hey just ₹500 a month, and boom—you’re in the market. No pressure to throw 50K at once and hope you didn’t pick the wrong day. Because lump sum investing? That’s kinda like showing up to a party and betting on the DJ to play your jam right away. Could work. Might suck.
But SIP? You drip money in slowly, so even if the market crashes next Tuesday, you’re not screwed. You’re buying low sometimes, high sometimes—but over years, it evens out. They call it “volatility smoothing” or whatever. I call it “my anxiety can chill.”
Here, look at this table I scribbled in my planner last year (yes I have a finance planner now, who even am I):
| Investment Type | Monthly ₹1000 (SIP) | ₹12,000 once (Lump Sum) |
|---|---|---|
| 10 years @12% | ~₹2.3 lakhs | ~₹3.7 lakhs |
| 20 years @12% | ~₹9.9 lakhs | ~₹9.6 lakhs |
So… SIP catches up. And you don’t feel the pinch. Unless you skip one because Swiggy happened. Been there.
Also side note, a lot of the money management tips, best investments for under 20 crowd is doing SIPs early — which is wild because I didn’t even know what mutual funds were at 20. I was blowing cash on random fast fashion and sad popcorn buckets.
But you live and learn.
If I could go back, I’d start a ₹500 SIP the day I got my first freelance gig. Skip the guilt pizza. Stack compounding. And honestly? Just leave it alone. It grows best when you’re not watching it like a hawk.
Anyway.
Mutual funds aren’t magic. But they work if you give them time. That’s the trick, right? Time. You plant it, then go do your thing. And one day, boom. You realize you grew a forest.
Or okay, at least a very well-fed money plant.
3. Mutual Fund Categories for Long-Term
3.1 Equity Funds
Okay so, equity funds. Honestly? When I first heard about them, I thought they were just stock stuff with extra steps. But now? I kinda get the appeal. You’re basically putting your money into companies — like actual businesses doing real things — and hoping they don’t screw it up. Or better, they grow like crazy.
So you’ve got these large-cap ones. Like the big boys. The Tatas, Reliance, Infosys… you know, the safe-ish bets. They’re stable. Think of them like that cousin who always follows rules, gets a steady job, and shows up to weddings on time. Not super exciting, but dependable.
Then there’s mid-cap funds. Oh boy. Riskier? Yep. More exciting? Definitely. I once invested in a mid-cap mutual fund thinking I was being super smart — and it tanked like a sad jalebi in hot chai. But then six months later, it bounced back. Like actually gave me over 22% CAGR (yeah, that thing everyone throws around — compound annual growth rate). Wild ride.
And yeah, if you’re asking which equity mutual funds give over 20% CAGR, some mid and small-cap ones do — but only if you have patience. And nerves. I don’t always.
Point is, if you’ve got 5–10 years (and don’t panic every time the market sneezes), equity funds are solid. Not magic, not foolproof. But with SIPs? You can ride out the chaos. I’d say mix a little large-cap for safety and some mid-cap for that “what if it goes big” hope. It’s just… balance.
Oh, and if you’re under 20 and want to start — this is one of those money management tips, best investments for under 20 kinda things no one teaches you at school. But should.
3.2 Hybrid Funds
Hybrid funds feel like the fund version of a comfort blanket. Bit of equity, bit of debt. A little drama, a little chill. It’s for people like me who want gains but also want to sleep at night without checking the Sensex at 3 AM.
These are for the “I want returns, but also don’t wanna cry when markets fall” types. Like if you’re investing for something 7–10 years away — a kid’s school, maybe even early retirement — this mix makes sense.
I got into one because my mom panicked every time I mentioned equity. She was like, “Put at least some in fixed returns!” So I did. Ended up with an aggressive hybrid that gave decent equity exposure but softened the blow during market dips. And honestly, that helped me stick with it.
It won’t beat pure equity funds in bull runs, but it won’t make you want to scream in bear ones either. Pick your poison.
3.3 Index Funds
Now index funds? They’re like that low-key overachiever in class. Doesn’t talk much. No drama. Just tracks the damn index. Nifty 50? Sensex? You pick. It copies.
And you know what? I used to think they were boring. I mean, passive investing? No fund manager trying to “outsmart the market”? Where’s the fun in that?
But then I saw the returns — and the low expense ratios. Like, some were charging less than 0.2%. Meanwhile, my actively managed fund was taking fees like it ran a five-star hotel and still underperforming.
Best part? No guilt. If the index goes down, it’s not you or your fund manager messing up — it’s just… the market. You’re just vibing with the average. And honestly, average isn’t bad when the average over 10 years is like 12–14%.
So if you’re looking for the best index funds in India for 2025, start with ones that track Nifty or Sensex. Check the tracking error (smaller = better), check the expense ratio, and you’re good. I have one I just dump money into every month and forget about it. Like feeding a plant and hoping it grows.
Passive can be powerful, y’know?
3.4 ELSS (Tax-saving)
I got into ELSS for the same reason most people do — tax saving. Section 80C was staring me in the face during filing season and I was like “okay sure, let’s try this.”
What I didn’t expect? It actually performed better than my regular equity fund that year. ELSS — Equity Linked Savings Scheme — locks your money for 3 years, which sounds scary, but weirdly it helps. You don’t pull it out during panic moments. You can’t.
So if you’re debating ELSS vs PPF — think of it this way: PPF is super safe, slow and steady. Like walking on a treadmill. ELSS is riskier but can get you somewhere faster — or you might trip. But you learn.
Best ELSS funds for long-term? Look at the ones with consistent 5+ year returns, decent fund manager track record, and don’t just chase last year’s stars. That’s like marrying someone just because they looked good in last year’s wedding album.
Anyway, tax-saving + growth = not a bad combo. Especially if you’re figuring out money management tips, best investments for under 20 early on.
3.5 Function-Specific Funds
This is where it gets a little spicy. You’ve got your Flexi-cap funds, Value funds, Small-cap beasts. It’s like choosing weapons in a video game — each with its own pros, cons, and risk of blowing up in your face.
Flexi-cap funds move between large, mid, and small caps — fund manager has the freedom. That’s good… or bad. Depends on the manager. One year they’re a genius, next year they’re chasing mid-cap dreams and you’re stuck with a 4% return. But the flexibility? It works long term. Just don’t over-romanticize it.
Value funds — ugh, I’ve had a love-hate thing with them. They look for “undervalued” stocks. Sometimes it works, sometimes it’s like digging through a garage sale hoping to find a Rolex. If you have patience and like the idea of buying what others ignore? Go for it.
Small-cap funds are the wild ones. High return, high risk. You could double your money in 3 years or lose sleep every other month. I did both. Once made 60% on a small-cap fund in 18 months and thought I was Warren Buffett. Spoiler: I wasn’t. Lost half of it next year.
Anyway, these are advanced level. Not beginner-friendly. But if you’re bored of index funds and want a little adrenaline, sprinkle a bit of small or value in. Like chilli flakes. Not too much.
Just remember: returns are sexy, but consistency is peace. Choose wisely.
4. Top Funds & How to Select
Okay. So, mutual funds.
I used to think picking a “top fund” was like choosing a chocolate bar. You know, just grab whatever looks shiny. Turns out… not the best strategy.
I’ve actually messed this up before—like, properly. Back in 2021, I dumped ₹10K into this flashy small-cap fund someone on YouTube swore would “double in 2 years.” Well. It did double… and then nosedived like a pigeon on Red Bull. I didn’t sleep for two nights. That was my emergency fund, too. Dumb idea. Anyway—
So if you’re like, “Dude, just tell me what funds are good,” I got you. Here’s the thing I wish someone had told me before I started investing in stocks and mutual funds: there’s no one “best.” But there are smart picks. Solid ones. Stuff that’s actually performed over time and isn’t run by some ghost fund manager who vanishes after the market tanks.
Here’s a rough list of funds that’ve done well (like, 3–5 year CAGR performance, under 1.5% expense ratio, and decent fund manager history):
- Quant Active Fund (this one’s wild—like rollercoaster wild, but decent returns if you don’t panic-sell)
- Nippon India Small Cap Fund (aggressive, but has held up)
- SBI Contra Fund (value investing vibes, surprisingly consistent)
- Motilal Oswal Midcap Fund (bit niche, but strong performance recently)
- UTI Flexi Cap Fund (good balance, not too flashy)
- HDFC Balanced Advantage Fund (hybrid, so less heartburn during crashes)
- Axis Bluechip Fund (boring, but steady — like dal chawal of mutual funds)
- Parag Parikh Flexi Cap (has that global exposure thing going on, low-key underrated)
Now, if you’re staring at that list and going, “How the heck do I choose?” — I made this stupid-simple table. It’s not perfect. But it helps:
| Fund Name | 3-Year CAGR | Expense Ratio | Fund Manager Tenure |
|---|---|---|---|
| Quant Active | 27.8% | 0.76% | 5+ yrs |
| Nippon Small Cap | 32.2% | 0.94% | 6+ yrs |
| SBI Contra | 23.6% | 0.96% | 4+ yrs |
| Motilal Oswal Midcap | 25.1% | 1.02% | 3+ yrs |
| UTI Flexi Cap | 21.4% | 0.85% | 7+ yrs |
| Parag Parikh Flexi | 20.2% | 0.74% | 9+ yrs |
Note: Those CAGR numbers change like Hyderabad weather. So check recent data. Please.
Oh, and if you’re into “stock market” drama, like “Is this better than just investing in stocks directly?”… honestly? Depends. Mutual funds are the lazy-smart-person move. You’re paying someone else to stress over charts and candlesticks. I’ve done both. Lost sleep in both. Made gains in both. But funds feel safer if you’ve got other life stuff going on (which, let’s be real, you do).
So yeah. Pick 2–3 funds. Don’t overthink. Set a SIP. Walk away. Check in once a year. Like your ex’s Instagram. Only less emotionally damaging.
That’s it. No magic sauce. Just steady, boring, long-term investing. Which is what actually works.
Alright, rant over. Go drink water.
5. FAQs
Okay. So this is the part where I’m supposed to list out “Frequently Asked Questions” in a neat format. But let’s be real—I didn’t even know what to ask when I started with mutual funds. Half the time, I was googling stuff like “can ₹500 make me a crorepati?” (lol).
Anyway, here’s what I’ve actually googled. Or asked people. Or awkwardly texted my older cousin about, pretending I knew more than I did. Hope it helps.
Q1. Can mutual funds double in 5 years in India?
Mmmm… they can, technically. Some small-cap or aggressive funds have done it in the past. But do they always? Nope. It’s like asking if a stock will moon. Maybe yes, maybe you cry for 3 years first. I’ve seen friends get lucky and double their money… and others who ended up checking their NAV every 4 hours. Please don’t be that guy.
Q2. How much can ₹500 SIP grow in 10 years?
I actually did this one. Not a joke. Started with ₹500/month when I was broke and fresh out of college. After 10 years, if you get like 12% average return (which is… okay), it grows to around ₹1.15 lakh-ish. Sounds small, but it adds up if you increase it yearly. I didn’t. Regret. Big regret.
Q3. Is ELSS good for long term tax and growth?
Yes. But also depends. ELSS sounds sexy—save tax, grow money. But it’s still equity-based. I had one ELSS fund that went nowhere for 2 years. Then boom. Then dipped again. So yeah, it’s good if you don’t panic-sell. And you don’t mind the 3-year lock-in. Some people hate that. I kinda like it. Stops me from doing dumb things.
Q4. What’s the difference between ELSS and NPS?
Dude, NPS is like your annoying responsible cousin. Less risky. Government-backed. Good for retirement. But boring. ELSS is the wild, flashy sibling who might take you to Bali or break your heart. Both save tax, but with NPS, the lock-in is till you’re like 60. ELSS? 3 years. Choose your flavor of prison, I guess.
Q5. Does market timing matter in SIP long-term?
Short answer? No. Long answer? I tried. I really did. Bought when the market dipped. Felt like a genius. Then next week it dipped again. Lost sleep. SIP is built so you don’t have to time anything. Just show up. Every month. Like brushing your teeth.
Q6. Which mutual funds doubled wealth in 3 years?
You want names, huh? Fine. Look up “Nippon Small Cap,” “Quant Mid Cap,” “SBI Infrastructure.” They had crazy runs recently. But please… don’t chase past returns like I did. Ended up joining the party after the cake was eaten. Learn from me.
Q7. Is SIP better than lump sum?
If you have anxiety? SIP. If you just got a fat bonus? Maybe split it into 3–4 parts and spread it. I dumped ₹50K in one go once—felt powerful… until the market fell the next week. SIP keeps you sane. That’s what I’ve learned.
Q8. Is it okay to start with just one fund?
Yeah. One good flexi-cap fund is a fine start. Don’t overthink it. I had 7 different funds at one point, just trying to “diversify.” It was chaos. I didn’t even remember why I picked half of them. Keep it simple.
Q9. What if I need the money in 2 years?
Bro. Don’t even think of equity funds. Go for debt funds, or just an FD honestly. Mutual funds for long term investment in India means long term. Don’t mess with it if you’ll need the cash soon. You’ll just stress yourself out.
Q10. Can I stop SIPs in between?
Of course. It’s not a gym membership. You can pause, skip, cancel anytime. But don’t make it a habit. It kills the magic of compounding. I skipped 6 months once, and it messed up the whole curve.
Q11. Which is better: Index fund or active fund?
This one’s like asking chai or coffee. Depends on your vibe. Index funds are boring, cheap, reliable. Active funds can beat the market if the manager’s smart. But also charge more. I do both. Because I’m indecisive like that.
Q12. How do I know which fund is “best”?
Lol. You don’t. No one does. Not even the experts. You just pick based on track record, manager reputation, expense ratio. Then wait. And watch. And sometimes cry. But mostly wait.
That’s it. If you’re still reading, you’re probably like me—confused but curious. That’s a good place to be. Mutual funds can work if you’re not expecting magic overnight. Patience. And no, I don’t mean “be patient” in a motivational-quote way. I mean, literally… go do something else while the market does its thing. That’s the trick.
Just… don’t panic-sell. Or invest all at once after reading a tweet. I’ve done both. Not proud. But hey—we’re learning.
6. Conclusion
I mean… look, I used to think investing was just this “big people” thing, you know? Like something your dad does with a tie on, sipping chai at 6 AM while checking Sensex on mute. But then I hit 30, my bank balance looked exactly like it did at 25 (actually worse), and one day I randomly googled “best mutual funds for long term investment in India” while waiting for my pani puri.
And here’s what I wish someone had just told me — without all the graphs and jargon and perfect sentences.
You just need to start. Like, with whatever you have. ₹500. ₹1000. Doesn’t matter. Pick something — an equity fund, an index fund, maybe an ELSS if tax is biting you — just… start. And then don’t look at it every day like it’s your ex’s Instagram. You’ll go nuts. I did.
Set up a SIP. Forget about it. Okay, not forget, but don’t obsess. Just check once a year. Like a health checkup. Move stuff around if it’s not vibing. That’s it.
Oh, and don’t dump everything into one fund just because someone on YouTube called it the “next big thing.” I did that. It flopped. Still haunts me when I open the app.
Consistency is boring, but it works. That’s what no one tells you. Long-term investing isn’t sexy. It’s slow. Quiet. But man, give it time — it moves. Like, compound interest isn’t a myth. It’s just… patient.
So yeah. No fancy quote here. Just try to be less impulsive than I was.
Diversify a little. Check once a year. Maybe write your future self a note or something.
And breathe. You’re doing better than you think.