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What is Systematic Investment Plan (SIP)?

SIP is abbreviated as a Systematic Investment Plan. It is an investment avenue that Mutual Funds present. It lets one invest a fixed amount in a Mutual Fund scheme at a steady pace instead of making a lump-sum investment. You can begin investing with as little as INR 500 a month. It is similar to a recurring deposit. It’s easier as an investor can give your bank standing instructions to debit the amount every month. SIP is getting popular among Indian MF investors, as it assists an investor to follow a disciplined manner for investing without disquieting about market unpredictability and timing the market. 

Mutual Funds offer Systematic Investment Plans that ultimately offer the best possible way to begin your investments for a long period. The earlier you begin investing, the chances of getting better returns increase. Start investing wisely to secure your future by building a financial corpus.

Secure Investment

Methodical

Small Payments

Easy and quick

Power of Compounding.

Get more stocks in smaller quantities.

It can be halted or skipped.

Benefits of Investing in Systematic Investment Plan (SIP)?

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Magic of compounding

SIP provides an orderly way of investing and assures you constantly make your investments grow. The automation ensures your investment cultivates which is sometimes not possible with a lump sum where sometimes you may forget to invest. The small amount you invest daily turns into a large corpus.

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Financial cushioning

As SIP makes you invest regularly, you get to build a financial corpus gradually without causing you to struggle with financial constraints. The amount an investor invests gradually snowballs into an enormous corpus due as a sum of your contribution and the returns compounded over time.

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Invest in a disciplined way

With SIP since your money gets auto-deducted from your bank account and transfers to your mutual funds. Also, contrary to lump sum investments, it assures that you are investing constantly because of the periodicity. The money will be debited automatically if you give your bank standing instructions

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Financial Knowledge

Undoubtedly, SIP can turn into the best investment option for you even if you do not hold any in-depth financial knowledge regarding market fluctuations. A potential investor does not have to spend his/her major chunk of time assessing the market movements or the right time to invest in.

Why do you need to Begin Investing in SIP?

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  • 01 Rupee cost averaging that comes with SIP enables you to reap the full advantage of market volatility
  • 02 The fixed amount you invest utilizing a SIP averages out the value of each unit.
  • 03 SIP lets you build a corpus that you can use in the future to manage unexpected or routine expenses.
  • 04 SIP helps you ease your apprehension that scarcity of money can easily give rise to.
  • 05 SIP harnesses the power of compounding that grows your money.
  • 06 SIP instills the habit of saving in individuals.

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Why Do You Need to Buy a SIP Plan from Policychayan?

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  • 01Credibility: Policychayan turns into a trustworthy platform to compare, find, and buy insurance and investment plans.
  • 02Distinctive plans: Here, you will find an array of plans that help you make a well-versed decision.
  • 03Tax benefits: Investment planning assists investors to minimize their tax liability.
  • 04Wealth creation: The ultimate goal of investment is to create wealth and upsurge the individual's net worth over time.
  • 05Protection from inflation: Inflation can easily make you struggle with a lot of financial problems, thus invest as early as possible.
  • 06Peace of mind: You tend to feel good when you are well aware of the fact that you are financially prepared to tame any expense.

Types of SIP

Perpetual SIP

A perpetual SIP usually targets the long-term financial goal of a mutual fund investor. These SIP do not consist of a renewal policy and one may keep investing as long as they wish to.

Types of SIP

Trigger SIP

It is usually considered by those investors who hold an in-depth understanding of mutual fund investment and market volatility.

Types of SIP

Flexible SIP

A flexible SIP aids such investors by equipping them with the freedom to upsurge or reduce the monthly investment amount as per their existing financial situation.

Types of SIP

Top up SIP

If you want to increase the amount you are paying for SIP at regular intervals, then some fund accommodates the option to top up your initial SIP amount.

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Frequently Asked Questions

A SIP account is a fund house arrangement that enables an investor to invest a small amount of money in a desired mutual fund plan at regular intervals. As you have to set aside a certain quantity at regular periods, having an active SIP account assists you to make a disciplined investor.

Yes, SIP is the safest process of investment that doesn’t even force you to research the market comprehensively. It gives you a strategic approach to investing and helps investors to build a financial safety net by instilling the habit of saving in them.

A lumpsum investment speaks of making the entire payment of your mutual fund investment all at once.

It is a prevalent misconception that investing in mutual funds signifies investing in stocks. SIP can be done in an equity, debt, or hybrid scheme.

With the auto-debit feature, the money will get debited automatically on the date which you have chosen for SIP. Nonetheless, if you don’t have enough funds in the bank account which makes you miss one SIP, then you don’t have to face any penalty. Your SIP account keeps working even if you miss one SIP date but after failing to make payment numerous times, it may get canceled.

A mutual fund is a group of funds that are managed professionally, where the fund manager purchases/sells securities following the scheme’s investment goal.