- Understanding SIPs
- Advantages of investing through an SIP
“You should start putting a part of your savings in a SIP!”
Is that a common statement you hear from your friends and family but don’t exactly know what a SIP is?
Well, you’re in the right place. Let us try and answer some of the queries that you may have with respect to SIPs.
What is a SIP?
As the name suggests, a SIP or a Systematic Investment Plan is a facility offered by Mutual Funds to their investors wherein the investors can systematically and at regular intervals, invest pre-defined amounts of money in a Mutual Fund Scheme of their choice.
Regular intervals? Who decides the intervals?
You decide the interval depending on your cash flow and other important factors. You can invest once a month or once a quarter or at any other interval that may be offered by the Mutual Fund scheme of your choice.
I am new to Mutual Funds. How much money do I need to have to start a SIP?
Rs. 500/- per month. Yes, you can start with an amount that can be as small as that, to begin with. You can also increase the amounts that you invest through SIPs gradually, as you become comfortable with investing in Mutual Funds.
Are there any advantages of investing through a SIP?
There are multiple advantages of investing through a SIP. Let us try and list some of the advantages for you:
Now that you have a fair idea of what a SIP is, remember just one mantra,
Start Early, Invest Regularly, stay invested for the long-term.