What is SIP?
SIP investment plans are the smartest and most convenient way of investing in mutual funds. Best SIP
mutual fund plans help create a planned approach towards investment and develop the habit of savings
in investors so that they can create wealth to achieve their financial goals in the short and
long-term.
Many investors think that an SIP is a product. It is not uncommon to come across a query - can I
invest in an SIP to achieve my goal? An SIP and mutual fund schemes are not synonyms. An SIP is a
mere tool that helps you to invest regularly in a mutual fund schemes, mostly in equity mutual fund
schemes.
SIP or the systematic investment plan is the simplest and the most convenient way to invest in
equity markets. SIP is a relatively new method of investing that has gained popularity in India in
the recent years. SIP is specifically meant for those investors who believe in regular and
disciplined saving.
In the SIP plan, a fixed amount of money is auto-debited from the investor's account at regular
intervals (it can be weekly, monthly or quarterly — as decided by the investor). Investors who
invest via SIP are allocated a certain number of units as per the current market rate at the end of
that day which is known as the Net Access Value (NAV). Every time you invest in SIP, additional
units are purchased from the market rate and added to your account. One can start investing in the
SIP anytime as per their choice and focus on keeping it for a long period of time.
Investing in SIP is considered as the most promising investment. Instead of keeping your money ideal
in a savings bank account, you can invest in a SIP and take benefit of regular savings along with
earned interest. However, the perks of investing in systematic investmentplan do not stop right
there.
Investors are always in a dilemma that if it is a right time to invest or not. No one can predict
which may the market will move or if the market has achieved its peak or low point. Investing
through SIP resolves this dilemma as it is a periodic investment which occurs across market cycles.
