Mutual Funds – SIP (Systematic Investment Plan)

What is a Systematic Investment Plan (SIP)?

A Systematic Investment Plan or SIP is a tool to invest money in mutual funds.

Why Systematic Investment Plan (SIP)?

Systematic Investment Plans helps you to inculcate the habit of saving and building wealth for the future.

What is the frequency of Investment?

SIP allows you to invest a predetermined amount at a regular interval; Weekly, monthly, quarterly or yearly.

Which frequency is the best?

Monthly, the problem with other frequencies is that such frequencies do not capture the market movements adequately.

How much can I invest?

You can invest as low as Rs. 1000/- on a monthly basis. We advise you to opt for 3-4 funds with a good track record instead of just going for one; say you want to invest Rs. 5000 a month; to be on a safer side and cover market risks you can go for 5 funds instead of one and invest a sum of Rs. 1000 in each fund.

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How much tenure should I go for?

Though the minimum tenure in most cases is 6 months to reap maximum benefits out of SIPs; Investors should ideally invest via SIPs over at least 3-5 years.

What is the mode of Investment?

Your money is auto-debited from your bank account and invested in a specific Mutual Fund Scheme. You are allocated a certain number of units based on the ongoing market rate (called NAV or net asset value) for the day.

Is SIPs flexible?

Yes, there is no compulsion. Investors can discontinue the plan at any time. One can also increase/ decrease the amount being invested.

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When should I start?

The rule for compounding is simple – the sooner you start investing, the more time your money has to grow and earn profits – Systematic Investment Plan (SIP) Calculator.

We all have various dreams that we want to realize from owning a car to going on a vacation. Besides these, we also need to plan for Children’s Education, their Marriage, and our Retirement. SIPs are the best way of investment to turn your dreams into reality.

‘Mutual Fund investments are subject to market risk. Please read the offer document carefully before investing’