Advantages of SIP
SIP stands for systematic investment plans, is an up and coming method of investing in mutual fund by paying a fixed amount in predetermined intervals into the fund. This has gained popularity in recent times. Many new small investors prefer to invest in them because of lower risk consideration.
SIP | Image Source : Quora.com
Today internet have simplified banking, one can easily complete the banking process sitting at their places just by few clicks. And so is Mutual Fund Investment plans, we can find lot of mutual funds providers providing their services online. Kotak Mutual Fund is one of the leading mutual fund provider, we can start the SIP investment online on their website, just by registering on the site.
There has been a lot of debate about the pros and cons of SIPs. Some major benefits of investing in an SIP are:
1. Habit of saving: The main essence of savings is to invest from an early age to multiply the amount of savings. Regular investment also leads to a greater wealth accumulation. Systematic investing is a time-tested discipline that makes it easy to invest automatically.
2. Reduces overall risk: Since the money is invested in regular intervals, the investment remains unaffected by the market’s health. With effective investment tools like SIP CALCULATOR the investment process is simplified.
3. No need for timing the market: there’s always this dilemma of weather it is the right time to invest or not. This however vanishes in case of SIP MUTUAL FUNDS as investors have to invest constantly in regular intervals and in turn get a assured return in the right time.
4. Convenience: SIPs are a very convenient form of investment as anyone can enroll for the SIP by opening an account and providing an OTM(one time mandate) for period.
5. Economical: SIPs are extremely economical and viable for small investors as the investments start at as low as ₹500. Thus becoming affordable and reducing the burden of lump sum investment.
So these are some of the many various benefits of going for an SIP investment buy like any other investment it comes with its own risks which definitely have to be taken into consideration before investing in such a scheme.