Benefits of Monthly SIP Investment - How Systematic Investment Plan is Useful

SIP or Systematic Investment Plant allows a user to build an investment portfolio with a small systematic investment at regular intervals. SIP is a smart financial planning tool that helps you to create wealth, by investing small sums of money every month, over a period of time.

Investing at an early stage of life lets you enjoy the benefits of two powerful strategies, rupee cost averaging and the power of compounding.

What is a Systematic Investment Plan (SIP)? :

A Systematic Investment Plan or SIP is a smart and hassle free mode for investing money in mutual funds. SIP allows you to invest a certain pre-determined amount at a regular interval (weekly, monthly, quarterly, etc.). A SIP is a planned approach towards investments and helps you inculcate the habit of saving and building wealth for the future.

Benefits of Monthly SIP Investment:

Long term financial goal can be aligned with SIP

Disciplined approach towards Investment helps in controlling the emotions

Lighter on the wallet

Reap benefits of starting early

Reduces Risk because of Rupee Cost Averaging

 SIP can be started with very small amount of money

 Timing the market is not necessary  

There are many companies in the market who are providing SIPs for mutual fund or equity fund including

Bajaj Allianz Future Gain , Policybazaar.com , SBI Mutual Fund

Birla Sun Life Insurance , HDFC Mutual Fund , ICICI Prudential funds

Top Canara Robeco Funds , Franklin Equity Fund, TATA Mutual Fund etc...

How does SIP work? :

A SIP scheme is a flexible and easy investment plan. Your money is auto-debited from your bank account and invested into a specific mutual fund scheme. You are allocated certain number of units based on the ongoing market rate (called NAV or net asset value) for the day.

Every time you invest money, additional units of the scheme are purchased at the market rate and added to your account. Hence, units are bought at different rates and investors benefit from Rupee-Cost Averaging and the Power of Compounding.

Even if each investment is small, over the time this can add up to a neat kitty. And the power of compounding can do wonders. In due course of time, a small amount can grow into a significant amount.

So Start saving today and make your future secure without worrying about market!!!