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  • ICICI Prudential Advisor Series - Dynamic Accrual Plan 31.85 0.00(0.00%)
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Nifty 50

10,195.15

10.2600 (-3.3%) 16-03-2018 12:00
Prev Close 10,360.15 Open 10,345.15 High 10,346.30 Low 10,180.25 Details
Equities
Asian Paints Ltd.(INE021A01026)
NSE: Asian Paints BSE: 500820 Sector: Chemicals
NSE Mar 16 2018, 4:01
1,160.80 23.90(+3.90%)
BSE Mar 16 2018, 4:01
2,260.90 23.90(+3.90%)
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What is a systematic investment plan or SIP?
A systematic investment plan or SIP is a smart way to invest in mutual funds at regular intervals. SIP allows an individual to regularly invest a fixed sum of money in any mutual fund scheme. Through SIP, an individual can accomplish his financial goals and cultivate the habit of saving money. Under SIP, money can be invested in any mutual fund scheme on a quarterly, monthly or a weekly basis. As per the payment mode, a fixed sum of money is deducted from the investors' bank savings account.

How does SIP work?
A systematic investment plan is one of the most disciplined ways of investing in mutual funds to build a strong financial corpus for the future. Based on the ongoing market rate, an investor is allocated a pre-defined number of units which increases or decreases his fund value. Every time an investor pays the pre-determined SIP amount, additional units are purchased at the ongoing market rate and are added to the investor's fund. Investors benefit through the system of rupee-cost averaging and the power of compounding.

What is Rupee-Cost Averaging in SIP?
We all know that mutual fund market is volatile in nature. But when you opt for SIP, your money investment receives more units when the price is low and you get lesser units when the price is high. Thus, this averages out the purchase cost of your mutual funds. SIP helps you beat the market volatility as it helps you get average price per unit over time which determines your overall return.

What is the power of compounding?
The larger the tenure, the higher the value of the fund as life compound interest accumulates over the period of time. Due to the power of compounding, an early investor always accumulates more wealth than the one who comes in later.

Benefits of Investing in Systematic Investment Plans

Flexible plans:
SIP mutual funds are very flexible in nature as investors can easily decrease or increase the amount of money to be invested. Also, SIP plans can be discontinued at any point in time. SIP also offers flexible payment mode as investors can invest money in monthly, quarterly or weekly basis.

Lowest lockin period:
If you are looking to avail tax benefits, then investment in ELSS mutual funds can be done in SIPs. ELSS mutual funds have a lock-in period of 3 years compared to other tax saving schemes.

Good return rate in comparison to RD and FD:
In comparison to RD and FD, mutual funds allow you to beat market inflation in an efficient manner by giving you high returns.

Convenient:
Investing in SIP is convenient as you can issue standing instructions to your bank to automatically auto debit the sum of your investment.

Long-term gains:
With the power of compounding and rupee-cost averaging, SIPs offer long-term benefit by giving attractive returns.

Start with just Rs. 500:
You can start investing in mutual funds through SIP with an amount as low as Rs. 500. Such a small amount won't burden your pocket and would also provide you with attractive returns over the years.

How Should You Invest in Mutual Fund-SIP or Lump sum?
Very often first-time investors get confused whether to invest money on a lump sum or monthly basis.

So here is a table that will help you make the right decision

SIP Invetsment Lump sum investment
Investment can be made in quarterly, monthly or weekly basis Investment is made one time
Gets you better returns during market lows Gets you better returns during market high
Protects investors from market crash Lump sum investments often lead to major loss of money during market crash

How to Invest in SIP?

You can easily start investing in SIP with InvestOnline.in. But before you actually start investing your hard-earned money with SIP, it is important you decide on the following things:

  • Determine your financial goals: Every mutual fund scheme serves a specific goal and purpose. So before investing, set your financial goals and accordingly choose the fund that suits your requirement. Our financial experts specially handpick the mutual funds for you on the basis of your financial requirements and income details.
  • Set a timeline: Determine a period during which you would require funds. This will be your investment tenure and you will have to keep paying the money till the end.
  • Decide how much you can invest: Using InvestOnline's SIP calculator, figure out how much you can invest regularly to accomplish your set financial goals.
  • Consult a financial expert: Consult InvestOnline.in's financial advisor to select the best mutual fund that suits your budget and requirement.

How to Start Investing in SIP with InvestOnline.in?

Now that you have set your financial goals and have calculated the sum of your SIP investment, here's how you can start investing in SIP mutual funds with InvestOnline.in:

  • Visit investonline.in
  • Click on mutual funds and select start investment
  • Choose the fund you would want to invest in and click on 'invest now'. You can also delegate the task of choosing the best mutual fund for you to the InvestOnline team
  • Add the selected mutual fund to the cart
  • Complete your KYC. To invest in mutual funds through InvestOnline.in it is mandatory to complete your KYC documentation and have a net banking account. You can easily upload your documents through our platform and there is no need of going through any cheque and form filling process
  • On completing the KYC, your SIP mutual fund investment would be processed and you would receive a confirmation purchase mail in your mailbox

FAQs on Systematic Investment Plan (SIP)

How much money do I need to start SIP?
You can start investing in mutual funds via SIP with an amount as low as Rs. 500.

What are the things to check while investing in mutual funds through SIP?
Always check the performance of the fund house, fund manager, risk parameters, charges and fees and the rankings of the fund.

Does SIP allow me to invest in all types of mutual funds?
Yes, with SIP you can invest in all types of mutual funds including debt funds, equity funds, hybrid funds and others.

Is it safe to invest in SIP?
Yes, it is safe to invest in SIP as you are investing your money in mutual fund schemes. However, the risk component varies depending on which fund you are investing in.

20 Years SIP Returns Calculator