What is Systematic Investment Plan?


SIP plans are about investing small amounts over time, rather than investing large amounts at once. They stagger their investments based on the amount of investment and time period.

Why Choose SIP Investment?

This investment provides financial control and discipline. Every month, the investor is able to know how much he can save on his monthly expenses for SIP investments. He also controls any unnecessary expenses that could be used to reduce the investment amount.

Investors can save time and avoid market fluctuations, market indexes, and investing regularly. Investors need to be able to monitor the market and make time for it. If one loses interest, they might end up putting off investing plans.

SIP investment is a way to save time and ensure financial discipline.

Systematic Investment Plan vs. Lump Sum Investments

a. There is no need to monitor the market constantly. The money is spread over time so that only certain parts of the investment are affected by market volatility. This is not true for lump-sum investments.

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b. Rupee cost average – SIP reduces the cost per unit of buying units. During low market cycles, the fund manager purchases more units and then sells them when there is a high market. This is Rupee cost average.

c. Initiate a SIP to get into the habit and save money.

d. A Systematic Investment Plan is a great way to start investing. It gives you exposure to equities for a small amount.

e. SIP investments are more reliable than lump-sum investments. They have consistently delivered higher long-term returns.

What is a SIP plan?

A fixed amount is debited automatically from your bank account every month after you apply to SIP plans. This money is invested in mutual funds that meet your financial goals. The NAV of mutual funds determines how many units are distributed at the end.

In this way mutual funds units will be allocated to you with each periodic payment increasing capital base. Also, you receive returns on units already allocated. Capitalization and returns are both possible.

The returns can be used to purchase mutual funds, or they can be reinvested in your financial plans and plans.

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SIP mutual funds can be customized depending on which type is chosen. Investors can choose the time interval at which they wish to invest, i.e. Monthly, bi-monthly or fortnightly. Quarterly.

Perpetual SIP plans do not require investors to choose the end date. Investors can, however, end their SIP Plan by submitting a written communication to fund house once they have reached their financial goals.

The plan can be set up to allow the investor to increase his investment amount at a certain percentage, for example 10% more than the amount previously invested.

Alert the plan sends alerts to investors about market conditions, allows them to buy more when the market is down, and so on

When is it a good idea to invest in SIP Investments?

After choosing the most suitable scheme plan that meets the investor’s financial goals, you can invest in the SIP plan at any time. A SIP plan can start with as little as Rs 500 per monthly. Investors do not have to wait for a specific time period. The sooner they start, the better.

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If you have a monthly SIP, you can quickly calculate how much you will accumulate at the end. The SIP calculator can assist you in this calculation. You only need to enter the monthly amount, the expected rate of return, and the tenure to get the final amount in seconds.