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What Is SIP Investment In Mutual Fund?

If you are one of those who think investment is a step to be taken in the middle age, you have missed the opportunity to build a substantial financial future. In simple words, there is no right time to decide about your brighter future. Earlier you take this step, stronger your financial future will be. If you have been lectured about this already, it's time to take some action now. The market is full of different investment schemes and plans. Go out there and fetch the best for you.

Systematic Investment Plan (SIP) is one of the cost-effective waysto start investing your money. Through this way you can invest in mutual funds and enjoy the market benefits with minimal risk. You can invest in mutual funds via SIP mode in two ways

1. A lump sum investment

One can invest in lump sum to buy funds. If you have earned a bonus of Rs.10, 000 and want to invest all of it in one plan, you can approach your finance planner to deposit the entire amount.

2. Periodic investment

Or you can invest in mutual funds into small bites. Meaning, invest certain (fixed) amount every month or quarter or at any time interval as per your choice and availability. This way you will not have to bare burden of producing a large sum within few days.

Disciplined investment

SIP investment in mutual fundsis a disciplined manner of managing your personal finance. Your invest-while-got the money attitude is changed to invest-on-regular-basis, giving a proper direction to your earnings.

Avoid market volatility

When you invest in securities on your own, you have to take into consideration things like market highs and lows, stock rates, market trends etc. Evaluating your investment plan on the basis of all such factors is a very critical job. But if you are investing in mutual funds through SIP, you don't have to gauge the market. In fact, one of the advantages of investing through this mode is that you can enter the market any time, without bothering about market volatility.

Enhance your wealth

With small and regular investments started early, you can build up a strong corpus to achieve your life goals. SIP investment in mutual fund not only secures your funds but increases your wealth as well.

So, rather than keeping aside some part of your income to open a fixed deposit account, why not put this small portion of your earning regularly into mutual funds through SIPwhere you can gain larger interest?