What is SIP & Lumpsum Investment

SIP: Systematic Investment Plan (SIP) is the financial variable wherein the investor invests the decided amount of money at regular intervals. The decided amount is debited from the investor’s mentioned bank account. It is one of the easiest ways for the first-time investor. Also, you can start with as low as INR 500.

Lumpsum: Lumpsum investments are a way where the investor purchases the units altogether. This method makes the best usage of market strategy in the aspect of the timing.

Planning to invest for a safe and happy future, then prefer looking at a few pointers wherein you can think about taking the best pick for your investment. The real question – What type of investment to choose- Sip vs lump sum mutual funds investment?

1. For salaried investor, SIP investment is a better option because of her regular cash flow. SIP is known as the discipline of regular investing and can be used for long-term (5 years or more will give you better returns). Still, if you are looking for lumpsum, prefer opting the time when you get money in the form of bonus/increment.
2.  If you are new to the world of investment and interested in equities, prefer going for SIP route. Being new to this, you might fall into the increase and decrease of market volatilities, thus causing jitters. So, SIP it is.
3. If you are investing for short-term, let’s say for 3 years for buying a car, then you can go for lumpsum investment in mutual funds, thus giving better returns than SIP.

How SIP & Lumpsum Investment Work in Mutual Funds

Pros & Cons of SIP & Lumpsum Investment

Pros of SIP:

1. Investment in the form of SIP is disciplined in its own way; it can be done in the form of monthly or quarterly installments, thus instilling the level of regular investments and savings.
2.  With SIP as an investment done regularly over a certain time-period helps in beating the market volatility, thus, mitigates risk.
3. Due to the minimum investment and availability of various payment intervals, the investor can do investment according to her income flow. Thus, the fruits of being flexible.
4. Setting up the SIP is an easy-going process. After all the basic formalities, the decided amount will be debited from the bank on the selected date. No trouble!

Pros of Lumpsum Investment:

1. Lumpsum investment is a good option when you have extra cash instead of keeping it idle or in the savings account.
2. Since the payment has to be made just once, the investor can stay relaxed without worrying about any due dates of the payments.
3. Lump sum investment in mutual funds is good to go for financial goals like marriage, child’s education, etc. But, if you are looking the investment for short-term, unfortunately, it’s not suitable for the short goals.

How To Do SIP with Gulaq?

Investing in SIP with Gulaq is not a hassle, rather it won’t take much of your time and effort. All you need to do is figure out if you are KYC compliant or not, if not, we have a simple process to deal with. And if your KYC is good to go, look at some of the sip plans according to the returns, goals, risks, horizons, and select the amount you are willing to start with. Tap on the start and the investment is done. That simple!