1. WHAT IS SIP?
A Systematic Investment Plan (SIP) is a mode of investment for mutual funds in which investors make regular, automated contributions periodically. With SIPs, you can plan your investments to achieve your financial goals over the long term. You can do this by determining the target amount and the amount you'd like to invest at periodic intervals in a mutual fund scheme you've chosen.
For instance, say you'd like to invest ₹500 each month for five years. You can set up an SIP with a mutual fund and automate your contributions for the said period. You can also choose to contribute more or less frequently. Typically, SIP mutual funds allow investing weekly, monthly, quarterly, semi-annually, and so on..
It's also important to understand the SIP meaning in mutual funds because it's not an asset in itself, but only a mode of investing in mutual funds. Any contributions you make towards your SIP will be invested in a mutual fund scheme that you choose.
2. BENEFITS OF SIP
SIPS offer a broad basket of benefits to investors across age groups and risk profiles. Following are some of the most prominent benefits of SIP plans:
This story is from the April 2024 edition of Investors India.
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This story is from the April 2024 edition of Investors India.
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