Why is SIP the best long-term investment plan?

SIP | Image Resource: businesstoday.in

When you invest a fixed amount, on the fixed date of every month for a predetermined period it is called as a Systematic investment plan or SIP. It is a hassle-free, methodical and best way of investing money in mutual funds which has recently become popular. The biggest advantage of SIP is even with a small monthly investment like 500 rupees per month you can get huge profit.

Here are some advantages of SIP that makes it best investment plan: 

1. You can stop it at any time: 

In case you are not willing to continue with your investment plan you can stop it at any given point of time and withdraw full amount. You need not wait for the maturity of your investment.  

2. You can skip payment: 

If due to any reason you can’t make payment, you can simply skip the payment and  you will not be charged for that  nor any kind of amount will be deducted from you and you can skip payment as many times as you want. 

   

3. You can start multiple SIP’S:  

If suddenly your income grows or you simply want to invest more you can start another Systematic investment plan. In fact, you can open as many plans you want under this scheme and there are no charges for doing so. Opening a SIP is free of cost. You can simply divide the amount in small portions which you want to invest in SIP and use them for multiple SIPs. This will be more profitable than investing in a single SIP

4. You can invest small amounts: 

No need to worry about investing huge amounts. You can invest as low as 100 rupees monthly and start your Systematic investment plan.

  

5. It helps to manage your savings:

 As you invest every month fixed amounts your savings are managed wisely. 

6. No need to learn about the condition of the market: 

When you invest in SIP mutual funds, you need not worry about the good or bad market timing. 

7. SIP Can be used for emergencies: 

Fund collected under this scheme can be withdrawn at any time when the need arises hence it can be used in emergencies.

  

8. Compound interest: 

When you fix a small amount for long periods you earn more year after year.

Above told benefits come only with SIP investments, therefore if you are looking forward to starting a small amount of investment, Systematic investment plan or SIP is the best form of mutual fund scheme where you can invest without any fear. The thumb rule of investing in this scheme is starting early, invest wisely and regularly. This plan will secure your future and you will not have to worry about your future.