What is Systematic Investment Plan (SIP)?

What is Systematic Investment Plan (SIP)?

Systematic Investment Plan (SIP) is an investment route offered by Mutual Funds wherein one can invest a fixed amount in a Mutual Fund scheme at regular intervals instead of making a lump-sum investment. Regular intervals may be once a month or once a quarter as you wish to plan. The installment amount could be as little as Rs.500/- a month and is similar to a recurring deposit. You can give your bank standing instructions to debit a fixed amount every month.

Due to its way of easy and secure investment in a disciplined manner without worrying about market volatility and timing the market, SIP has been gaining popularity among Indian MF investors. SIP is the best way of investments for the long term in order to maximize the end returns.

It is what MF says- Start Early, Invest Regularly to get the best out of your investments.

What SIP offers?

  • SIPs (systematic investment plans) are an easy method for investors to begin their mutual fund investment journey without having a lump sum capital.
  • It allows an investor to invest small amounts systematically into a mutual fund over a long period of time.

Returns & Risk

  • While investing it should be noted that past performance may or may not be sustained in future and is not a guarantee of any future returns.
  • Mutual Funds do not have a fixed rate of return and it is not possible to predict the rate of return.
  • Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
  • One can use SIP calculator on the site of Mutual Funds sahi hai.  It is an online financial tool that can help you calculate the returns you may earn on your SIP investments in mutual funds. With the utilization of this calculator, you would not have to go through manual calculations. It can be used online from anywhere and at any given time.

See also…
What is Mutual Fund

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