SIP (Systematic Investment Plan) – Meaning, Mutual Fund SIP Plans & Benefits
A systematic Investment Plan, commonly referred to as an SIP, allows you to invest a small sum regularly in your preferred mutual fund scheme. By activating an SIP, a fixed amount is deducted from your bank account every month, which gets invested in the mutual fund of your choice.
ups & downs
Top SIP Mutual Funds in India for 2022
Small Cap Funds
Mid Cap Funds
Mid Cap Funds
Credit Opportunities Fund
What is A SIP?
Pro Tip: Invest in direct funds pay at 0% commission and earn upto 1.5% extra returns Invest Now
Unlike a lump sum investment, you spread your investment over time with an SIP. Therefore, you don’t need to have a large amount of money to get started with your mutual fund investment through SIPs. By investing via an SIP, you are forced to set aside a sum at regular intervals, which help you instil a sense of financial discipline in the long run.
How Do SIPs Work?
When the markets are down, you purchase more fund units while you purchase fewer units when the markets are surging. Since NAV of all mutual funds are updated on a daily basis, the cost of purchase may vary from one SIP instalment to another. Over time, the cost of purchase averages out and turns out to be on the lower side. This is known as rupee cost averaging. This benefit is not available when you invest a lump sum.
Why should you invest in SIP Mutual funds?
With an SIP, you can invest small amounts at fixed intervals (weekly, monthly or quarterly) instead of making a one-time investment.
How to Choose Best SIP Mutual funds?
However, you have to make sure that the fund you pick meets the below criteria.
You have to assess your requirements and match them with the objectives of the fund under consideration before initiating an SIP into it.
If you are a risk-averse investor, then it is important that you invest in those funds that carry minimal to no risk.
₹500 Crore Asset Under Management
Duration of SIP