What are systematic investment plans or SIP schemes? Here’s a brief overview of what they are, different types of SIP funds and benefits of investing in SIPs
SIP schemes are one of the most popular forms of investments today. SIPs have many benefits that help you invest your money in a time bound and disciplined way to help maximize your wealth in the long run. If you’re new to SIPs, don’t worry. There are several top financial services companies such as Mahindra Finance who’s expert asset managers invest on your behalf and thereby manage and diversify your portfolio. Know more about what a SIP plan is and the benefits of investing in SIPs.
What are SIPs?
What is an SIP plan or Systematic Investment Plan? It is an investment opportunity that is offered by mutual funds, to help investors invest money in a time bound and disciplined manner. An SIP allows an investor to invest money in predefined intervals in any particular mutual fund scheme. There is flexibility in how much you can invest and the time intervals as well. You can invest as low as Rs.500 on a weekly, monthly, quarterly or yearly basis. The choice is yours. SIP schemes are popular mutual funds because they are less susceptible to market risks. Since the investment is time bound, SIP performance is less affected by market fluctuations, and through the power of compounding and average costing, you get the best SIP returns in the long run.
How does an SIP work?
Now that you know what is an SIP plan, let's find out how an SIP scheme works. Before we answer this question, it's important to understand the difference between a regular fixed deposit investment and an SIP. A fixed deposit account will help generate good returns on investment, but won't help you generate wealth in the long term. An FD is not subject to market forces whereas SIP schemes are. Which means that if you invest in the right mutual funds and top SIP plans, your SIP performance will improve and you can see your wealth grow significantly in the long run.
Some of the best SIP mutual funds in the market include Axis bluechip fund, DSP equity fund, Franklin India focused equity fund, ICICI Prudential blue chip fund, Nippon India large cap fund etc.
Why invest in SIPs?
- SIP schemes help in inculcating financial discipline and are extremely convenient. Since money is deducted at a specific date in a timely manner, it's an excellent investment option for people who need something systematic.
- SIP schemes are great for individuals who don't have much money to begin with either. Whether it be for millennials fresh in the workforce or experienced professionals, an SIP works for both. You can start an SIP with as low as Rs. 500 per month. It's important to know where to invest to get the best SIP returns.
- -SIP schemes follow the compounding effect, wherein the money invested will grow with time. If the market is doing very well, you can accumulate a lot of wealth through SIPs. Invest early to reap the power of compounding and high SIP performance!
- SIPs provide 2X higher returns than a recurring deposit, fixed deposit and other traditional investment schemes.
Hope you have completely understood what is an SIP plan! These are just some of the reasons why you should invest in top SIP schemes. If you’re wondering why ‘mutual funds sahi hai’, look no further than an SIP fund!
At Mahindra Finance, we offer expertise to help you choose the top SIP schemes, where we invest your money in high performing assets, to help increase your wealth! You can contact an asset manager at Mahindra Finance, who will take the time to find the perfect investment opportunity for you. Now, with our digitally enabled SIP solutions, you can start investing right from your home with the tap of the finger!