What is Systematic Investment Plan (SIP) ?



A mutual fund is one of the most popular modes of investment opt by investors desirous of making good returns on the same. There are generally only 2 ways to invest in a mutual funds scheme- Lump sum investment and Systematic Investment Plan.

Lump-sum investment refers to the investment of a good sum of money once into the scheme. It is suitable for times when you have a free load of cash in hand with you. However, the availability of a comparatively huge sum of money is not very common and this is the reason why many potential investors were unable to make investments.

Systematic Investment Plan (SIP) was brought as a mean of making a systematic and regular investment. This requires the investors to invest a fixed amount of funds at stated intervals, regularly. This has dealt with the inability of huge sums and allows the common man a chance to invest.

Comments

Post a Comment

Popular posts from this blog

8 Best Reasons to Continue Your SIP

Image
  In these abysmal times of ongoing pandemic and unstable market dynamics, the markets have been highly affected due to the investor consternation and fall in demand. It is said that around 59 lakh SIPs have been stopped, however, it has been observed that at the time when many SIPs have been either stopped or paused there has been additional inflow made by some investors cushioning the SIPs inflow. We would like to suggest some reasons you should consider before deciding whether you should continue your  investment in SIP s or not. Lower Valuation One of the prime causes leading to the discontinuation of  SIPs  is the fall in the values of your investment. Before going more into this let’s briefly talk about the nature of the bearish phase that the country is going through at the moment. The important characteristic of the bearish phase is that it is temporary and after the end of such phase there is always a bullish market where the overall market is highly satisfy...
Read more

Difference Between Regular Vs Direct Plans in Mutual Fund ?

Image
  Mutual fund is an investment fund where multiple investors pool their money to purchase securities. Such funds are managed by a highly trained professional commonly known as a fund manager or portfolio manager. Due to factors like benefit of diversification and comparatively stable returns, mutual funds have become one of the most looked after investment options.  When you opt for mutual funds you can invest through 2 schemes i.e. through regular or direct schemes. Let’s briefly talk about both the schemes.  Direct investment plan  is where an investor can directly invest into the company’s plans, generally through its website. Regular investment plan is where you buy the same securities through an advisor.  What is the Difference Between Regular and Direct Schemes?   In direct schemes the  expense ratio  is low as no brokerage is paid to any adviser resulting in comparatively high returns as compared to the indirect schemes.  However,...
Read more

Investing In Liquid Funds : Let’s Compare Its Advantages And Disadvantages

Image
  Liquid funds are one of the many types of   mutual funds   available in the market. They invest in short‐term assets such as treasury bills, government securities, repos, certificates of deposit, or commercial paper. They are debt funds which enable companies to raise money for a Period of up to 91 days. These are highly secured and short term funds usually suitable for putting money aside for emergencies as there is almost zero risk involved with such securities.  Advantages of Liquid Funds Liquid funds are perfect for financial specialists who need to park their money for a short period of time.The aim of these liquid mutual funds is to provide higher returns while offering a similar level of security for the money invested.   Here are some of the advantages of  Liquid Funds  :- Low Risk:  Liquid funds invest only in highly secured government funds. So the associated risk is minimal. Along with this they are known to provide stable returns to ...
Read more