The full form of SIP is a Systematic Investment Plan. In this plan, investors can invest in a mutual fund scheme for a fixed amount of money on a regular basis which can be quarterly, monthly, weekly. In SIP, you will be able to invest in a mutual fund scheme and the amount of money you want to invest will be fixed and the duration will be also pre-determined.
There will be market risks in mutual funds if you want to invest via SIP in periodic installments, then the risk gets distributed. The amount and the duration of your investment in SIP will be different from one scheme to another.
There are many types of SIP available in which you can invest. Basically, there are 4 kinds of investments which are Top-up SIP, Flexible SIP, Perpetual SIP, and Trigger SIP.
In Flexible SIP, you will be able to change the amount of investment according to your choice. If you are going through bad financial conditions then you can adjust your installments until your financial condition gets better. If you get bonuses, then you can deposit the whole amount of the bonus or any amount from the bonus into the SIP account.
The Top-up SIP will enable the investors to increase the amount of the SIP during regular intervals. You will be able to invest in those funds which are performing very well. Whenever your income becomes higher than usual then you will be able to deposit a higher amount of money in SIP to make the most out of it. One of the most important parts of this type of SIP is, you can avail this facility through ECS mode or direct debit.
If you have a good awareness and knowledge of financial markets then you can go for Trigger SIP. In this SIP, you will be able to set a target based on price, NAV, index level and pre-specified date.
If you want to invest for a long time and you find yourself too busy and you don’t have time to renew your SIP then you can go for Perpetual SIP. These SIPs are with no tenure end date. You will have to give a written letter to discontinue your SIP otherwise according to the fund houses your SIP will continue until the year 2099. But it is always better to have an end date of your investment otherwise there will be no financial goal for you to achieve.
The investment plans in a SIP is very simple because when you have decided in which SIP you are going to invest then the pre-determined money will be automatically deducted from your bank account and it will be invested in the mutual fund scheme of your choice. It is better to start investing earlier because this way you will be able to create wealth for yourself. In SIP, you will get interests of the money you have deposited and the interest of the funds will also get interests and that’s why it is better to start earlier.
And it will be a huge amount of profit if you invest for a long period. You can go for a SIP Calculator which will help you to calculate the estimate of the return you will get from the mutual funds in which you have invested through SIP. SIP Investment has become one of the most popular investment plans for millions of people. You will have to find the Best SIP Plan for you. You can search for the Best mutual funds for SIP and you will get mutual fund companies like Kotak mutual fund and Mirae asset emerging bluechip fund.
There are many benefits you will get from the Systematic Investment Plan. You will be able to make good investment habits by investing through SIP. It will enable you to save on a regular basis and you will be able to reach your financial goals step by step.
When you are planning to invest a specific sum of money for a predetermined period of time then you will see that when the investment price falls down then the more stocks are being purchased. You will be able to get a huge amount of money by investing only a small amount because the amount you will invest will get interested and the interest of the amount will also get interested so you will be able to use the power of compounding. And for this reason, you must start investing earlier to make the most out of the investments.
You will not have to worry about market risks. It’s even hard for the experts to understand when the market will rise up and when it will come down. So, if you invest through SIP then it will keep you away from timing markets.
There are many important reasons for which you should invest through SIP. If you choose SIP for your mode of investment then you will invest a fixed amount of money on a daily basis. You will purchase more units or stocks when the markets go down and NAV is low and you will buy fewer stocks when the market is high. This process will allow you to buy more stocks from the lower market value. If you start investing earlier then you will be able to make a huge amount of money from a small amount of investment.
If you have any dreams like buying a car or home, a world tour with your family, send your children to college then you will be able to save from now and when the time comes then, you will be ready for it. It will help you to invest in mutual funds while balancing the financial condition of your family. You will be able to invest any amount of money through SIP so you will be able to invest for a short period of time too. If you can not invest for a long time and if you can not afford to go for equity funds then this is the best option for you to invest.
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