What Is Systematic Investment Plan (SIP)

Systematic Investment Plan (SIP) is a very easy & convenient mode of making investments in mutual funds on a regular basis. SIP allows one to cultivate a habit of savings & creating wealth for the future by starting early. Offering ease & flexibility, through SIP one can create a planned approach towards investing right. SIP gets auto-debited from the investors account and the amount is invested into a mutual fund scheme that has been specified. The investor then gets a certain number of units which is based on the current ongoing market rate. Every-time a SIP is made, additional units keep getting added to the investor’s account. SIP has proved to be an ideal choice of investments for retail investors who lack resources to pursue active investments.

Benefits of SIP

CONVINIENCE

Offering a seamless investment option, SIP allows investors to automate deductions from their bank account through a standing instruction, ensuring a smooth auto-debit process.

DISCIPLINED SAVING

Investing through SIP ensures regular savings, promoting financial discipline while saving the way to achieving one’s financial objectives and goals.

FLEXIBILITY

With SIP, investors have the flexibility to increase or decrease the investment amount as needed. However, it is always advisable to continue SIP with a long-term perspective.

LONG TERM GAINS

Investing with SIPs leads to long term gains because of the power of compounding & rupee cost averaging. Rupee cost averaging is an automated market timing technique that eliminates one’s need to time the market.