What are the benefits of SIP?

SIP Mutual Funds| image source : freepik.com 

SIP or ‘systematic investment planning’ is a disciplined way of investment and today, you can start your investment or SIP with INR 500 per month only. You set aside a fixed amount every month out of your income or salary and invest in a SIP at regular intervals. There are a lot of factors which should be considered while selecting an SIP like past performance, growth index, beta of a portfolio, and other factors affecting the portfolio directly and inversely. It also reduces the risk by diversifying your portfolio meaning if your risk appetite is high than you can choose a more equity concentrated SIP otherwise if you have a moderate or low risk appetite than you should go for a SIP which has debt and equity both. In this case, you can choose Kotak Mutual Fund as SIP investment plans which ranges from high to moderate risk and also from long term to short term perspective.  

Benefits of SIP mutual funds: 

• Easy to Invest- SIP mutual fund can be easily set up online from the comfort of your home. All you need is to choose the right mutual fund, the amount you want to invest, select the installment date, provide your bank and security details, and you will get the details of your investment or schemes on your online dashboard. Kotak Mutual Fund has made it easier for customers to invest, and you can easily start your SIP account by entering your phone number, email ID and PAN number.
• Cost Averaging- SIP deals with market volatility in a systematic manner. One of the biggest benefits of investing in SIP is mitigating the market volatility by cost averaging. In cost averaging you buy more units of mutual funds when market is down. This means you're investing at all prices and when the market goes up or down the value of your investments is increasing. 
• No Lump sum Investment- A SIP can be invested for as less as Rs. 500. You don't need a hefty amount to start SIP. You can invest as much as you like depending on your savings or income. Even you can also get the tax deduction from selected tax-savings funds or schemes. 

An SIP can help you meet your financial goals and you can also secure your retirement with a SIP investment. An investment in a government security like a bond or certificate will have lower returns or an investment in shares will have higher returns or lower returns associated with volatility. If your financial goals are aligned with your SIP then you will reach your financial goals irrespective of the market movements.

All You Need To Know About Systematic Investment Plan Or SIP

SIP

A Systematic Investment Plan is the most preferred plan when it comes to mutual fund investment i. While a lot of people still believe in traditional investments, systematic investment plan has made a mark in the finance sector with its incredible performance. 

If you are planning to invest in sticks via SIP and do not know which SIP plan to choose, here is a list of things that will help you find the right plan for your capital.

What does SIP mean?

SIP is basically known as systematic investment plan which allows you to invest a certain amount of money at regular intervals to gain maximum returns. This method brings discipline to the investment technology. The investor also gets an insight into the share market

When should one start an SIP?  

There is no particular time to start an SIP. All you have to do is fill the common application form with an SIP mandate and submit it to the desired mutual fund house.

For how long does one needs to invest in an SIP?

It is advised to invest in mutual funds for at least six months. However, the investor can decide the tenure for his/her investment. This option is called as the ‘perpetual option’, by opting for this; it means that your SIP will go on until you instruct the mutual fund house to stop it. It is often suggested to set a goal of investment. Also, it is advisable to select it for longer duration of time to derive maximum returns.

Can one change the SIP amount?

The amount of investment can be increased or decreased based on the investors wish. The investor will have to cancel the previous mandate and provide the new one. Also, there is no charge levied by the mutual fund house if you stop an SIP.

Can one make a lumpsump investment in the mutual fund scheme?   

Adding a lumpsump amount does not affect your running SIP. One can add the amount in the scheme at any time they want. Usually, investors make changes in their investment amount during market fluctuations or when they gain profits. 

Is it fine to miss an SIP payment?

There is no issue if you miss a particular payment. Also, your account will not be deactivated but you can stop investing money depending on your financial situations.

How To Choose The Best Sip For 5Years?

Best Sip Plan For 5 Years

When it comes to buying a mutual fund, one must do their homework and do some research before buying. Systematic investment plan or an SIP is a capital investment plan is the best way of investing money in which a small amount of money is invested over regular intervals of time. Also, it helps create long term wealth and generate better returns on investments. 

Before buying, one should know the benefits associated with of the best sip plan for 5 years. Have a look at some of the major benefits of using an SIP.

Flexible investment

Investment in an SIP is termed to be flexible as there is no specific tenure associated with it.

Low investment

An SIP can be started with a small amount of money; however it is advisable to keep the amount low and tenure high.

Lower market risk

The risk factor associated with an SIP investment is quite low. However, it is not totally eliminated.

Investment in an SIP is considered to be fruitful when invested for a longer period of time. Most investments include a 1 year plan, 3 year and 5 year plan. The key aspect to gain maximum profit is to follow the mantra of “lower for longer” which means lower investment for longer duration. The best sip plan for 5 years can thus give you major benefits in a timely manner. The process of investing in an SIP remains same whether it is for shorter duration of time or longer duration of time. You can either invest online or offline in SIP. 

After you have selected the duration, it is very important to select the best SIP plan. One should carry out thorough research of different mutual fund schemes available in the market; compare the prices and other aspects. 

There is no point in paying a high amount for a similar competitive unit. Selecting the right house and the best fund manager is also important. As all your investments are taken care of by the mutual fund house you should opt for an experienced and reputed mutual fund house to gain the better returns on your investment. At the same time the fund manager and his team are the most crucial factors of the house. Make sure you check whether he has the necessary skills or not. Also, check the sustainability during market fluctuations before making an investment in the best sip plan for 5 years. Although the risk factor associated with an SIP is low one should not neglect the above mentioned aspects while they make a long term investment for 5 years. 

Invest Into SIP To Gain High Returns After Investment Tenure!

SIP

Imagine a situation where you wanted to buy a dream car, but just don’t have enough to pay the entire amount and taking a loan will put a dent in your finances as you have to repay a high amount every month with interest.  Instead of taking a loan, how about using savings gained by investing in mutual funds to buy the car.

Would not that give necessary boost to achieve your dream of getting a fabulous vehicle in the shortest possible time? Check out top mutual funds in the market and invest every month an amount that is lesser than what you would be paying for a five year car loan with interest. In just a year, you would have saved enough to pay up at least half the value of the car, while the remaining amount can be financed through a small loan which carries a low interest rate.

About SIP

Systematic investment Plan or SIP is your means to getting into a sound financial position. If you are already not into the habit of setting aside a small amount of money from your salary every month and putting it aside for future needs, it’s time to start now with mutual funds investment schemes.

The key benefit here is that you set aside a small amount every month to which interest is added on a monthly basis. The interest gets compounded so at the end of the investment tenure what is gained is a large amount, which can take care of big financial needs. Instead of investing into an LIC policy or bank fixed deposits, putting money into mutual fund helps gain more money and also makes you financially sound. 

Kotak Mutual funds is highly attractive as it offers high interest on the invested amount. Check out the many funds into which you can your money such as debt, tax saver, hybrid, equity etc. It offers much equity and debt funds which give different types of returns. You can opt for a fund with open-ended policy else one that has three year equity lock in period. 

You can also look into Kotak EFTs and Fund of Funds both of which offer attractive returns. Gain the maximum from investing into these mutual funds by opening an account online. There is an automatic deduction of investment amount from your account for the various funds that you have selected to put money into.