Thursday , October 28 2021

SIP Mutual Funds: Here’s What You Should Know

A comfortable lifestyle requires sufficient money. While you are living contentedly, you might be having aspirations and dreams that you want to fulfill. You must be well-equipped monetarily to complete these ambitions. One way to ensure that you have the financial support for your hopes is by investment through SIP (Systematic Investment Plan) schemes.

SIP is a facility that enables you to invest in mutual funds. You can invest through SIP on a weekly, monthly, quarterly or annual basis. Using an online SIP calculator, you can evaluate your requirements and accordingly invest through mutual funds of your choice. Under this investment facility, a fixed amount of money is deducted from your savings account monthly for investments in the chosen mutual funds. The route to investments through SIP assures you discipline and is thus, advantageous for long-term planning.

Benefits of SIP Investments

There are various benefits of investment through SIP:

  • Investment through SIP proves to be convenient as it provides you with the benefit of starting with a minimum amount. With the use of SIP calculators, you can check how much to invest as per your suitability.

  • If you are planning for long-term investment, SIP is the ideal option. It will be advisable that you consider your financial goals while using the SIP calculator. It will enable you to evaluate the amount you must invest. You will be able to receive the benefit of compounding. It ensures that with earning returns on the principal amount, you also earn on the gains from the principal amount.

  • As it takes time to achieve the target, you must start investing in SIPs from early on. The advantage of starting in the initial years of earning is that you will have the benefit of time. You will be able to gain substantial profits through SIP.

  • Another significant gain of investment through SIP is that you do not have to worry about the volatile market in long-term investment. You will get good returns as an investment through SIP is less impacted by the ups and downs in the market.

Things to Consider Before You Invest Through SIP

There are a few things to consider before you start investing through SIP:

  1. Selection of Right Scheme for Your SIP Investment

Ideally, you must have a diversified investment strategy. You must choose mutual funds which have been doing well consecutively for the past few years for investment. This way, you will be assured of good returns and can plan to invest money accordingly.

  1. Choice of the Right Amount for Investment

You must evaluate the amount you need for a specific goal with the help of the SIP calculator. There can be a possibility of varying returns due to changes in the rate of returns generated over a period. With the calculated future value and a lower return expectation, you can decide the right amount for investment through SIP. It will also enable you to ensure that there is no hindrance between you and your goal.

  1. SIP Date and Bank

The profit through SIP investment highly depends on the credits such as monthly interest, salary credit and others that you receive from your bank. You must make sure to choose the date for SIP investment later than the date on which you receive the salary or earnings. Make sure you maintain a minimum of a one-month SIP amount additionally in your bank account.

With the above inputs, you can comprehend that it is vital for you to have full knowledge of the pros and cons of investing in SIP. If, however, you are facing trouble in understanding, there are reputable banks like Axis Bank, which will readily assist you. They provide you with all the required information and also offer lucrative SIP investment options. With their online SIP calculator, you can also evaluate your requirements and plan to invest right.

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