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