Mutual Fund SIP 5 Key Features: Experts believe that there are many reasons for the tremendous jump in investment through SIP. These include simple investment, starting with a small amount, the benefit of compounding in the long term.
Mutual Fund SIP 5 Key Features: Investment through mutual funds is becoming increasingly popular. In this too, most of the investment is coming through Systematic Investment Plan (SIP). In July, a record inflow of more than 23,000 crores came through SIP. Experts believe that there are many reasons for the tremendous jump in investment through SIP. These include simple investment, starting with a small amount, the benefit of compounding in the long term. Here we talk about 5 big benefits of SIP, which every investor should know.
1. Start with a small amount
The specialty of SIP is that you can start investing even with a minimum of Rs 100 per month. This means that you do not necessarily need a large amount to invest in mutual funds. Today, there are many such schemes in which investment can be started with a SIP of Rs 100.
2. Regular investment
Through SIP in mutual funds, you get into the habit of regular saving and investment. This is because, you have to deposit a fixed amount on a fixed date, so you prepare for it in advance. That is, it becomes a regular habit of yours.
3. Automatic deposit
Starting investment through SIP is also easy because it links your bank account to your investment. With this, a pre-decided amount is automatically deducted from your account on a fixed date.
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4. Simple KYC process
Before investing in mutual funds, investors always want to know what documents they have to submit. Know Your Customer (KYC) process has to be completed for investing in mutual funds. Identity proof and address proof are required for this. PAN and Aadhaar will also be required.
5. Fund assessment
Before starting investing through SIP, you can estimate the annual growth and performance of the fund with the help of SIP calculator. For example, if an investor has started SIP in a fund 5 years ago, then what is its value today. How was the annual growth of the fund. This will also give you a matrix of investment in the entire mutual fund.
What is SIP?
SIP is a systematic way of investing in mutual funds. In this, the investor does not have to face direct market risk like equity. But there is a risk associated with market fluctuations. However, there is a possibility of getting more returns than traditional investment products. It is also important to know that past returns in mutual funds are never a guarantee of future returns. Therefore, the investor should take investment decision after looking at his income, target and risk profile.
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