1. IDFC Banking & PSU Debt Fund

This fund invests in bonds and other debt securities issued by banks and public sector undertakings (government-backed companies) that generally have a high credit rating in India (AA+).

• AUM: ₹19,205.19 Crores
• 3-Year Returns: 9.39%
• Expense Ratio: 0.62%
  

IDFC Banking & PSU Debt Fund’s SIP for 3 years has outperformed its benchmarks, NIFTY Banking and PSU Debt Index and CRISIL 10 Year Gilt Index.

2. ICICI Prudential Corporate Bond Fund

This fund takes a slightly different approach to the one mentioned above. It primarily invests in bonds issued by corporations that have a high credit rating like HDFC Limited. It also invests in government-backed securities. 

• AUM: ₹20,979.92 Crores
• 3-Year Returns: 8.48%
• Expense Ratio: 0.58%
  

ICICI Prudential Corporate Bond Fund has been active for over 12 years and has generated 8.48% returns when speaking of a SIP for 3 years. 

3. HDFC Money Market Fund

This fund primarily invests in money market instruments that mature in a year or less like Treasury bills and government bonds. 

• AUM: ₹14,252.35 Crores
• 3-Year Returns: 6.69%
• Expense Ratio: 0.35%
  

HDFC Money Market Fund has been on the market for over two decades and a SIP for 3 years in this fund would’ve generated solid returns of 6.69%. 

4. Nippon India Liquid Fund

Liquid funds are generally used for generating solid returns for short term events like emergencies. This fund primarily invests in debt securities that mature in 60-91 days. 

• AUM: ₹21,654.55 Crores
• 3-Year Returns: 5.30%
• Expense Ratio: 0.32%
  

This fund is also eligible for Cube ATM, a feature that lets you withdraw money instantly. Nippon India Liquid Fund is one of the best SIPs for 3 years as it has outperformed traditional bank savings accounts and FDs. 

5. PGIM India Insta Cash Fund

This is another liquid fund that invests in creditworthy bonds and debt securities that mature in less than 91 days. 

• AUM: ₹21,654.55 Crores
• 3-Year Returns: 5.30%
• Expense Ratio: 0.23%
  

PGIM India Insta Cash Fund is featured on this list of best sips for 3 years because it has been handpicked by Cube’s advisor Wealth First and has generated relatively better returns than bank savings accounts and FDs.

1. Is a 3-year SIP suitable for all types of investments?

Ans. A 3-year SIP may not be suitable for all types of investments, especially those with longer-term financial goals. It is best suited for short to medium-term objectives where you anticipate needing access to your invested funds in approximately three years.

2. What factors should one consider when choosing a 3-year SIP?

Ans. Factors to consider when selecting a 3-year SIP include your financial goals, risk tolerance, and the investment horizon. It's essential to choose mutual funds that align with your goals and have a history of consistent performance. You can consult a Cube Wealth Coach or download the Cube Wealth App.

3. Are there specific mutual funds designed for a 3-year investment horizon?

Ans. While there are no mutual funds specifically designed for a 3-year horizon, you can select mutual funds based on their investment objectives. Debt funds or hybrid funds with a significant debt component are often favored for shorter investment periods.

4. What are the advantages of a 3-year SIP over other investment options?

Ans. A 3-year SIP offers a disciplined and automated approach to investing, which can help individuals achieve their short to medium-term financial goals. It provides an opportunity for wealth accumulation with lower volatility compared to equities.