Remember your first piggy bank? Those childhood days when we used to get regular pocket money from our parents. After spending it on food, books, and candies, we would store the left-over money in a piggy bank. At the end of the month, we saw that every penny we saved turned into a large amount.SIP induces the similar regular saving habits which we learned during our childhood.
Systematic Investment Plan (SIP) allows you to invest a fixed amount in mutual funds regularly usually every month.
Why invest in SIP?
Sip is a great way to enforce financial discipline in your life, It also helps you invest regularly without having to struggle with market risks and index level in the long run. As you start investing in SIP, a fixed amount will be deducted from your bank account at a particular date every month. This eliminates the need of you finding time to observe the market, find the right mutual fund schemes and decide on the amount to invest every month.
How to invest in SIP?
Investing in SIPs is extremely simple, which is why beginner investors should consider SIP schemes.
Can you customize SIP?
As the most popular schemes include investing a fixed amount every month, beginners are unaware of the fact that they can customize the way to invest money in SIP. Many mutual fund institutions allow investors to invest monthly, bi-monthly or every fortnight.
In step-up systematic investment plans, investors can increase the investment amount periodically. Perpetual SIPs allow investors to invest for an indefinite period. Once you meet your goal, you can stop investing in SIP by informing the fund house in writing.
SIP is a simple and easier way to start investing in mutual funds, to induce a disciplined habit of savings and meet your financial goals in the long run.