Advantages of SIP


Hello Friends, 

My this blog is related to tell you about the Advantages of SIP (Systematic Investment Plan).  

"SIP is a plan in which an individual deposit a particular amount for a selected period of time. "


Let's see the advantages of SIP:
  • Start with a very small amount: First advantage of SIP is that it can be started with a small amount let's start with Rs. 100 per month up to the amount as per your capacity. It can be started with a big amount in one shot but there will be more risk. 
  • Duration for investment: Another advantage of SIP is that you can choose the investment duration as per your choice. You have to invest minimum for 3 years but it is better to take more than 3 years for better returns.
  • No need to time the market: It is not necessary for the SIP to see the ups and downs in the market before investing. It will not affect much due to fluctuations in the market if you are making investment on regular and disciplined manner. 
  • Investment in various mutual funds: Through SIP in mutual funds your money will not get invested in a single fund like Share market, it will get invested in various funds and it will help to manage the ups and downs in the various funds and keep your money grow in a systematic manner. 
  • Less Risk: Through SIP your savings have less risk because your fund has been distributed in the different sectors of the economy through Debt fund as well as Equity fund. You can choose the funds as per your requirements. 
  • Compounding creates magic: Through SIP your funds will gets multiplied through compound interest and your savings will get increased automatically. 
  • Switching: In SIP you can easily switch your funds from one fund to another as per your choice. 
  • Withdrawal:  There is no maturity period for investing in Mutual Funds through SIP. You can request to withdraw an invested amount either in part or all of it  at any time. The only exception is Tax Saving funds which come with lock in period of three years from the date of investment.

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