SIP stands for Systematic Investment Plan. It is offered by mutual funds. This plan allows you to invest a predetermined amount of money in mutual fund schemes at regular intervals. SIP investment can be used by those who prefer to invest small amounts of money, rather than investing the entire amount. The Systematic Investment Plan works in the same way as a recurring deposit. You can put up as little as Rs500, and you can also request a monthly debit at any time during your tenure.
SIP’s most notable feature is its ability to invest long-term, despite market volatility or market fluctuations. This plan is suitable for all investors. SIP is a great way to get started if you’re a beginner looking for an easy and safe investment route. SIP is a great way to invest your return from other investment forms if you’re a seasoned investor.
You should establish your financial goals before you invest in a SIP. Once you have a clear idea of what you want, you can start to plan the timeframe and determine the amount you will invest. Next, and most importantly, you need to choose and purchase the right type of mutual fund. This information will provide you with a glimpse into the world of SIP.
How do I buy mutual funds? Your financial goals will determine the type of mutual fund you choose. You should be familiar with the types of mutual funds on the market before you buy one.
- Equity and Growth funds: This investment is primarily made in shares of companies. It is appropriate for people who are looking to create wealth. The best type of long-term mutual fund investment is equity.
- Fixed Income Funds: These investments can be made in the form commercial papers, debentures or government bonds. For those looking to generate stable income from mutual funds, these fixed income funds can be a good choice.
- Hybrid fund: These hybrid funds combine the best of Fixed and Equity funds. You can grow your portfolio while still earning a steady income. You can choose from a variety of plans including monthly income plans, pension plans, conservative balanced funds and child plans.
These are the facts to remember when investing in SIP:
- Mutual fund investing is not an investment avenue. The amount that you invest in mutual funds is irrelevant. Investing in mutual funds is best done early.
- The greatest benefit to investing in mutual funds is the fact that you can spend more time and effort to find the right investment.
- You don’t have to be at least 18 years old in order to invest in mutual funds. You can even open an investment account for your child and begin investing. You don’t need to wait until the market is right for you to invest.
You don’t have to wait until the perfect time, when you can invest in your future now. Mutual funds are a great investment option that you will never regret.