Systematic Investment Plan, popularly known as SIP, is a wise strategy to invest one’s money in mutual funds. SIP investment enables an investor to plough a certain amount of money at fixed intervals, say monthly, weekly or quarterly. SIP allows an individual to save and invest money in a systematic way. This is particularly favorable for those people who wish to invest a substantial amount, but as a result of its unavailability, are incapable of investing the total amount all at once. In order to have an extensive understanding about how to start SIP investment, it’s advisable to consult a SIP advisor. SIP investments come with myriad benefits. Take a look.
- Least Investing – One of the most enticing features of SIPs is that it can be started even with as less an amount as Rs1000.
- Rupee Cost Averaging – SIPs permit the investors decrease their regular investment cost. On account of the varying prices of the mutual fund plans each month, the Mutual Funds units are obtainable at divergent costs every month. Hence, when an investor puts a particular sum of money each month, they can purchase the different values of the mutual fund units.
- Advantage of Power of Compounding – The sooner you begin putting money into SIP, the better would it get, as over time, it would result in an accumulation of wealth. The best part with SIPs is that you can commence putting money with as insignificant an amount as 1000. In order to procure the complete advantage of power of compounding, SIPs must be done for a period of 10-15 years or more.
- Tax Benefit – Either through lump sum or Systematic Investment Plan, investing money in mutual funds furnishes the investors with many benefits. For instance, the long-term capital gains obtained in equity funds have a tax liability of only 10% on long term capital gains. When it comes to Debt funds, 20% tax is imposed on the long-term capital gains, and that too post the permitting of indexation benefit.
The SIP consultants possess ample knowledge regarding the suitable financial tools that can bring off remunerative returns with least likelihood of unmanageable risks.