Picking the best SIP Plans Online with Ease
Systematic Investment Plan or SIP allows you to save a little-bit of your money regularly, so that you have access to a large capital in the later needed time. In short, a SIP gives financial security wherein you get to put regular instalments of money securely, especially for the salaried individuals. Instead of spending the wholesome of the salary, an individual can accumulate a portion of his/her salary into the SIP investment plans. Thus, saving for any future necessities. Before jumping on picking the best SIP plans online, let’s figure out what is a SIP. Here:
What is a SIP?
A SIP is a flexible and easy investment plan. Your money is auto debited from your bank account and invested in a specific mutual fund scheme. A certain number of units based on the ongoing market rate for the day. So, each time you invest money, additional units of the scheme are purchased at the market rate and added to your account. It is an economical way of investing a fixed amount for a continuous period in a mutual fund at regular intervals. Monthly, and quarterly are the options for you to take the pick whilst investing in a SIP.
How to pick the best SIP plans online?
Things to keep in mind:
- The chosen mutual fund must be in market from the last 5 years
- The mutual fund you are planning to invest must be operated by your bank. Cross check the information before proceeding.
- The fund house chosen by you must be recognizable and reputable.
- The total size of the corpus or asset should be huge.
- Check the plans & avoid which involves risks such as low-liquidity and volatility.
- Opt for the funds having good ranking & credited by CRISIL rated funds.
Why investing in a SIP plan?
- The Habit of Saving: One of the benefits of SIP is it helps in building the habit of investing and saving simultaneously. It gives a feeling of commitment to the investor for keeping a fixed amount aside every month; the amount can be as low as INR 500. In short, you don’t feel the burden on your shoulders. The entire perspective towards investing and saving has changed by SIP.
- Financial Objectives: If there is no plan for managing the expenses, then it becomes a tedious job to grab the things you are looking forward to. This is true for life goals as well. You may have thought of going on an exotic vacation or buying a house. But don’t know where to proceed from. Taking care of this, SIP help in many ways whether it’s a long-term goal or short-term. Since the overall process of SIP is disciplined and goal-oriented which keeps you on the right road.
- Diversification: Instead of putting money in just one asset, it’s better to assign it in different classes. For example: If it’s within the same asset class (like equity funds), better to own 4–5 different ‘equity funds’ in your portfolio. This is known as diversification. It helps in spreading the investment amongst numerous securities for reducing any sort of fluctuations in returns.
- 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. NOTE: NAV prices fluctuate daily. So, it’s 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.
“Are you looking to invest? How about opening your account with Gulaq & start investing in Direct Mutual Funds? Get in touch.”
*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.