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All About Systematic Investment Plan

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all about systematic investment plan sip

Saving helps you build wealth over a period. One of the best ways to generate saving is through various SIP Plans. People in the financial industry are aware of the Systematic Investment Plan (SIP). But common people are still not aware of the SIP.

What is SIP? 

SIP stands for Systematic Investment Plan. It allows investors to invest in mutual fund regularly over a period. The investor invests a fixed amount at a regular interval over a fixed period. It allows an individual to save regularly so, that he/she can access to a large capital resource over a period. Let’s look at various advantages and disadvantages of SIP (Systematic Investment Plan).

Benefits of Systematic Investment Plan: 

Become Regular and Disciplined Investor: A SIP allows anyone to become a regular investor. Since one saves regularly, it helps them cutting unnecessary expense. Thus, allowing them to become a disciplined investor.

Large Funds are not required:  SIP removes the risk of having a large fund required. One can enter the market by simply investing with a minimum amount of Rs. 500 per month.

Rupee cost averaging:  This is one of the most vital parts of SIP investing. A SIP investment allows you to take advantage of rupee cost averaging. Let’s understand the concept. NAV prices fluctuate daily. So, better to make a bulk investment, one should invest regularly. You will buy more units if the NAV prices are lower and fewer units when the NAV prices are high. Thus, increasing the overall returns of your portfolio.

Hassle Free: Investment is SIP is quiet, easy compared to other money market instrument. Apart from that, it allows an investor to increase or decrease the amount of money they have.

Things to be taken into consideration before investing in SIP 

Investing in SIP funds is one of the best ways to secure the future. But before investing in a SIP, certain things must be taken into consideration.

Avoid volatility and bull market: A sip investor should avoid volatility in the market as well as a bull market. A bull market is a time when prices are way higher than their average cost.

Investing in large amount: A sip investor should never make a large amount of investment in a single time.

Setting exceptional goals: Make realistic plans and never try to set exceptional returns from it.

How to invest in SIP Directly 

The early investor always faces the issue while investing in SIP. There are numerous ways to invest in it. An investor can use offline channels or online. To invest in SIP online, one needs to follow these procedures:

Get Your KYC done: 

To make an investment in mutual funds, make sure that one has certain details such as Pan card, Date of birth, Address proof, a cheque book, and passport size photograph. Make sure to provide either of the soft copy document of driving license, bank statement and a utility bill to verify your address to the website address.

Start your SIP Online: 

Once the KYC is done, then directly go to the portal of the mutual fund house. Then click on the register button or new investor link. Afterwards, fill the basic details and then create your username and password. Again, note down and re-login to confirm the registration process.

What are the top sip plans 2018? 

Investor before buying any SIP plans must give an analysis to check various plans and their performances. It gives us a clear indication of the fund performances and what it’s future is going to be. If you are the new market entrant, then previous year performance records will give a clear understanding about of future course of actions. So, before investing this year, let’s look at the top sip plans 2018 and how was their performance?

  • Aditya Birla SL India Opportunity Fund.
  • SBI Magnum Mid Cap fund.
  • UTI Mid cap Fund.
  • ICIC Prudential mutual fund.
  • HSBC small cap equity fund.

Apart from that, the Middle investor can also look for various other schemes according to their needs and condition. The small and middle investor always looks for the best Sip for 5 years investment. Here are some of the best plans.       

Best SIP for 5 years investment
Funds     Returns Rate  
SBI Blue Chip Fund 18.3%
ADITYA BIRLA SL Equity Fund. 17.7%
Fraklin India Prima Fund. 18.5%
Reliance Small Cap Fund. 30%
ICIC Pru Balanced Fund 18%
Mirrage Asset Blue chip Emerging Fund. 29.6%

 

*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.

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