Investing in a Systematic Investment Plan (or SIP) is a way to invest over time. It is a way to invest fixed amounts of funds, such as monthly, quarterly, or semiannually.
SIP in mutual funds is a monthly investment plan in which you invest a certain amount of money in a scheme of your choice. The money is automatically deducted from your bank account because of the setup.
Systematic investment plans (SIPs) are simple tools for creating wealth by making regular, small deposits over time. Mutual fund SIPs offer many benefits.
In mutual funds, you can buy units in SIPs. The fund can be invested at both highs and lows. To earn money, you don't have to time the market. With SIP investing, this uncertainty is eliminated.
Markets reflect the economy, and just as the economy experiences ups and downs, so do the markets. So while a drop in the market might wipe out some of your gains, a SIP can make these dips work in your favor.
HELPS TO BUILD CORPUS WITH SMALL AMOUNTS
Investing in mutual funds through SIPs is also affordable at just Rs. 500 per month. By investing in mutual funds, you can take advantage of India's growth even if you don't have much money.
Investing in SIPs is well known for allowing investors to be disciplined about saving. The monthly budget also instills some financial discipline. Investors can choose to increase or decrease the amount they invest in SIPs at any time, since they are so flexible.
BOTTOM LINE
Apart from the top three benefits listed here, SIP investments in mutual funds offer convenience, diversification, flexibility, no charges for starting a SIP, etc. Moreover, SIP challenges the traditional belief that making money is difficult.