Systematic investment plan helps to build wealth by investing small amounts of money regularly. It is a mutual fund. It has no hassle, automated process and you can make securing financial goals and leading a life of contentment. Every individual has different goals. You can achieve these goals ,the monetary amounts, that time required and associated risk are different for different purposes. You can start a systematic investment plan for your every need with what you can afford to invest. You could work towards achieving objectives simultaneously by starting multiple SIP.
You can select equity oriented funds for long term goals. You can select debt oriented funds for short term goals. It is an investment offered by many mutual funds to investors that helps to invest small amounts periodically instead of lump sums. You can invest weekly or monthly.
The fixed amount of money can be as low as Rs 500. Predefined SIP intervals can be on weekly, monthly, semi annually, quarterly or annual basis. You can invest in a time bound manner without tension about the market dynamics and stand to benefit in the long term due to average costing and power of compounding. It is convenient as you can give you a bank standing instructions to debit the amount every month.
It has gained popularity among mutual fund investors. It helps to invest in a disciplined manner without worrying about market volatility. You should follow some easy steps before you start investing in SIP. You should set your financial goals, it should be specific and attainable. You should set a timeline for your investment. You should decide how much you need to invest. You can use a SIP calculator to figure out the amount you need to invest regularly. Consult a financial advisor for a plan.
SIP is done by money market experts. If you start investing early you can earn bigger returns. If you stay longer you can enjoy the compounding effect. Never skip your monthly payment. SIP is work on regular and periodic purchase of shares of security of a fund. These shares are bought at various prices .
You should invest small amounts of money regularly in a particular instrument. You can invest monthly. You should identify a particular fund. Then give SIP mandate to the bank .Submit adequate documents. Then you can invest money in it. You can invest daily also. Daily SIP mutual funds are Reliance mutual fund, LIC mutual fund, etc.Daily wages people can invest an amount in it.
If you get a monthly salary,you can invest an amount monthly from the bank.you should make automatic investment facilities. It is very useful for us. It saves an amount before we spend it automatically.
Benefits of systematic investment plan
- Its compounding effect means you can earn returns not only on your actual investment but also on the gains on the principal amount.
- If you start saving earlier and regularly you can achieve your goals easily.
- It provides a variety of benefits.
- You should make sure the funding account has enough money to cover your contributions.
- You will get discipline for investment.
- In the equity market, there is a fluctuation. So you will get a fluctuated averaging price.
- You should select a fund for a purpose.
- Then monitor your investment once in three months.
- You can select the auto debit feature to ensure the amount is transferred to the fund directly from bank accounts.
- It is a recurring investment process.
- Don’t worry about timing the market.
- You can easily invest it.you can easily monitor the details of investment.
SIP calculator
It is an online financial tool that helps to calculate the returns you would earn through SIP investments.it tells you how much you would invest every month to earn a good amount. It helps to achieve your financial goals. Itbis an automatically computing complex machine. It is highly effective for calculations. It does not need pen and paper.
You should provide inputs,the calculator gives a result within seconds. It has mainly 3 input boxes.
- Monthly investment amount
- Investment period
- Expected annual returns
You need to enter the amount to invest monthly. Then enter the tenure of investment. Then you need to enter the date of return you expect on the investment. Then click the calculate button.
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