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Systematic Investment Plan Decoded


Systematic Investing Plan (SIP) in a mutual fund is the answer to preventing the pitfalls of equity investment and still enjoying the high returns

  • Disciplined investing: Being disciplined is a key to investing success. Through a systematic investment plan (SIP) you can choose to invest fixed amounts in a mutual fund scheme which could be as low as Rs 500 at regular intervals (like every month) for a chosen period of time (say for a year). The amount you invest every month or every quarter will be used to purchase units of a SIP of a mutual fund scheme. Small amounts set aside every month towards well performing SIP mutual fund schemes can make an investor achieve their financial goals in future.
  • Invest in instruments that beat inflation: Equity investing can help you combat rising inflation that diminishes the value of your savings.
  • SIP over a longer period can reduce the cost per unit: An investment of Rs 24,000 in a mutual fund resulted in a value of Rs 25,200 after 12 months; whereas an SIP mutual fund investment of Rs 2,000 per month grew to Rs 27,095 after the same period.
  • Fewer efforts to opt for SIP: The procedure to invest through SIP is easy. All you need to do is give post-dated cheques or opt for an auto debit of a specific amount towards SIP from your bank account. SIP plans are completely flexible. One can invest for a minimum of six months or for a long tenure. Also, there is an option of choosing the investment interval which could be monthly or quarterly.

*Ideally, seek advice from professional financial advisors


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