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.