SIP, Systematic Investment Plan, puts emphasis on the philosophy of “Saving at the first hand and then spending the rest”.
With SIP, one can invest small amounts of money at fixed intervals (weekly, monthly or quarterly) instead of doing a one-time investment. SIP allows one to buy units on a given date each month so that one can implement a saving plan for themselves.
An investor can invest a pre-determined fixed amount in a scheme every month or quarterly, depending on his convenience through post-dated cheques or through ECS (auto-debit) facility. One-time investment mode can also be chosen if one has money in hand that can be invested and a SIP can be chosen if one expects a regular inflow of money in future.
The power of compounding works in case of SIP and helps one’s money earn more money over the years. SIPs work on the principle of rupee-cost averaging. By investing a fixed amount every month, investors are able to buy more units when the net asset value (NAV) of the fund falls, and fewer units when the NAV rises, thereby averaging out their cost of purchase. However, equity investments made through the SIP route can also be volatile. The biggest mistake that investors can make when SIP returns turn negative is to stop their monthly investments.
In short – Why SIP?
The disciplined approach to investments
No need to time the market
Harness the power of two powerful Investment strategies:
Rupee Cost Averaging – Benefit from Volatility
Power of Compounding – Small investments create Big Kitty over time
Lighter on the wallet
Reap the benefits of starting early
The secret to achieving Much More with SIP
List down your dreams and goals and work out a plan to achieve them through SIP
Ascertain the monthly/quarterly SIP required to achieve your goals
Steps to Invest in SIP
Set Investment Goals
Every mutual fund has a specific goal and purpose. One need to choose that which suits one’s requirements.
Choose
Making an informed decision based on one’s individual needs and choosing a Systematic Investment Plan one wants to invest in.
KYC
The mutual fund investments mandate KYC documentation and a net banking account.
The industry has seen a strong growth in SIPs in recent years due to increased investor awareness.
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