What is a Systematic Investment Plan (SIP)?
Systematic Investment Plan, or we popularly know them as SIP, are modes of investment in a mutual fund scheme, wherein you can purchase mutual fund units of the fixed price in regular intervals. This fixed amount gets deducted from your bank account at regular intervals, which you decide beforehand. SIP Mutual Fund investment is ideal for those who do not want to monitor the equity market or their equity status on a daily basis and this can also become the best SIP to invest. You choose the best SIP to invest in, and it will give you benefits later.
The Mutual Fund SIP is the best way to begin investing in the stock market, as well as one of the smartest and simplest. If you are still confused, just pick up your phone and call Wealthcare India for a free consultation. SIP plans in India require less monitoring and are usually for people who can wait patiently for 3-5 years in the short term and for 5-10 years in the long term. You can invest in long term SIP plans or short term SIP, but the short term plans won’t yield better returns.
SIP Calculator – Calculate returns for SIP investment
Further, SIP mutual fund investment gives you the flexibility to pause or stop the systematic investment plan (SIP) whenever and wherever you feel the need to do so. Hence, Mutual Fund SIP are best when you want less monitoring and good benefits in the long term.
Why Systematic Investment Plan (SIP)?
Mutual Fund SIP offers the benefit of compounding
Interest on your investment over time gets compounded with time for the systematic investment plan, and what you receive when you redeem is your invested amount plus accumulated interest. When you choose the best SIP to invest in, you get maximum benefits. The only R&D part on your end is finding the best SIP to invest in or you can hire the best wealth management company in India for you, who will do all the research for you for SIP plans for India.
Consider this:
If you know the SIP plans in India If you invest 5000 monthly for the period of 30 years, your systematic investment plan (SIP) amount will grow to Rs. 1,76,49,569, against your investment of just Rs. 1800000. Hence your investment is roughly equal to 9.8 times your investment amount.
Consider the following variables |
|
| Current Age | 28 years |
| Expected Retirement Age | 60 |
| Monthly Expenses For Current Lifestyle | Rs. 30,000 |
| Current Saving per month | Rs. 10,000 |
| Expected Pre Retirement Return | 15% |
| Expected post retirment return | 7% |
| Life expectancy | 85 years |
Result generates with these variables |
|
| Years to retirement(Yrs) | 32 |
| Amount Required P.M - Post Retirement | 30,000 |
| Corpus to be Achieved @ Age 60.0 | 44,88,960 |
| Corpus you will accumulate with current savings | 9,47,28,246 |
| Existing corpus will grow to | 0 |
| Total savings at the time retirement | 9,47,28,246 |
With the Retirement Calculator, you can calculate your own retirement amount depending on your age and current expenses.
This calculator will also show you if there is any shortfall in the investments and, if yes, how much more you should invest in order to live a stress-free life after retirement.
Investment for child’s education
Your child’s education is perhaps the next goal in the priority list.
If you start early, you can be mentally prepared for the expenses incurred.
You can use the education calculator to determine how much you should invest in your children’s education.
For example, consider the following :-
Child Education |
|
|---|---|
| Child's Age Today | 10 Year |
| Start Collège at age | 18 Year |
| College Duration | 5 Year |
| Current cost per year | Rs. 4 lakhs |
| Expected rate of return | 12% |
Similarly you can calculate your corpus and/ or the corpus required for marriage.
Knowing the Performance of Your Systematic Investment Plan (SIP)
Knowing your Mutual Fund SIP and finding the best fund to start your systematic investment plan in are important, but understanding how your fund has been performing or has performed in the past is also necessary. You can keep a monthly track of your fund, whereas in equity, you have to keep a daily track.
Also, if you are about to invest and start the Sip, you should know how your shortlisted funds have performed in the past ten years. You can visit systematic investment plan (SIP) performance page, for the same.
SIPs are Investor Friendly
Your SIPs have a flexible nature. Depending upon your needs and convenience, you can pause, stop, redeem and invest more as Top Up.
SIPs can be Topped-Up
You can increase your systematic investment plan (SIP) amount by a fix percentage or a fix amount with respect to your income. This leads to generate more wealth in the long run.
Investment without top up
If you invest Rs. 1,000 for 30 years, your total invested amount will be Rs. 3.60 lakh, while the return will be of Rs. 27.31 lakh.
Investment with Top Up
If you invest Rs. 1,000 for 30 years with an annual top up of 10%, your total invested amount will be Rs. 19.73 lakh, while the return will be of Rs. 27.31 lakhs.
SIPs are Flexible
When you choose the best SIP Mutual Fund investment, you get the flexibility to increase or decrease the SIP amount, depending upon your financial scenario. Also, you can choose to pause or resume the SIPs. The most important aspect is that when you select the best SIP to invest in, you get the highest ROI.
If you need further advice on the best SIP to invest in, you can contact our advisor, who will guide you through the whole process. Fund performance keeps changing, and you need to have a good knowledge of the stock market before choosing the best fund that is performing the best at that time. So, it is advisable to get expert advice from someone who has been monitoring all the funds for a long time, like Wealthcare India.
Benefits of SIP Mutual Fund Investment
SIPs are indeed the best bet when it comes to investing and preparing for your future goals with SIP plans in India. With SIPs, you can invest in a disciplined way. However, make sure not to get affected by the market lows. For all the above reasons, you need the best SIP to invest in, and who better than Wealthcare India can suggest the best SIP to invest in, keep track of your investment, and change it from time to time according to your goals? You have the option to increase, decrease, or choose the top-up option. To learn more, read Why Should You Invest in SIPs?
Best Mutual Fund SIP Plans 2023
A Systematic Investment Plan Presentations |
||||||
|---|---|---|---|---|---|---|
| Scheme | Value & Return | (3 Yr) | Value & Return | (5 Yr) | Value & Return | (10 Yr) |
| Total Investment: | 360,000 | % | 720,000 | % | 1,200,000 | % |
| Nippon India Growth Fund Reg (G) | 587,339 | 30.00 | 991,549 | 18.53 | 4,017,587 | 20.76 |
| HDFC Large & Mid Cap Fund Reg (G) | 576,561 | 28.92 | 912,374 | 15.61 | 2,747,401 | 14.77 |
| SBI Small Cap Fund Reg (G) | 587,339 | 30.00 | 998,707 | 18.78 | 6,335,680 | 27.53 |
| Parag Parikh Flexi Cap Fund Reg(G) | 516,882 | 22.47 | 961,605 | 17.46 | 3,640,342 | 19.24 |
| Kotak Equity Opportunity Fund Reg (G) | 529,985 | 23.96 | 897,827 | 15.04 | 3,366,856 | 18.02 |
How to choose the SIP?
The SIP you choose is heavily influenced by the timeline you have for completing the goal, your risk profile, and your current financial situation. Once you’ve taken note of everything above, you can select funds-whether debt or equity mutual funds-and begin the SIP with the desired goal in mind. So, consider all the above factors and choose the best SIP to invest in. Any confusion? Call WC Securities Pvt. Ltd.; we are eagerly waiting to make your wealth grow steadily.
Still confused about investing in SIP? Or Still confused about in SIP?
We understand SIPs can still be a daunting task to invest in when you are starting. Do not worry. You are not alone in this journey. When you start, it can seem confusing at first. But it is the best way to invest your money in the long term. The SIP is an investment plan in which you can invest a specific sum every month for a certain period of time, with the sum compounding over the SIP’s maturity period.
How does SIP work?
SIP is the most safe and risk-averse form of investment. It can be challenging at first but it will yield great results later.
- SIPs are very flexible and convenient, you can start or start according to your need.
- This teaches us how to budget and how to invest money.
- SIP minimizes the risk of market ups and downs.
- SIP helps with long term investments by just investing small amounts.
- Further, you can get income tax benefits under section 80C of Income Tax Act.
You can start investing in Systematic Investment Plans with just as low as Rs. 100 and go higher up according to your investment requirements.
For the automatic renewal process it’s mandatory that you submit the required documents around 30 days before the main renewal process.
Once the SIP starts, you cannot increase or decrease the duration of that SIP. But, you can invest in a different SIP for a longer period.
There will be bank charges for auto debit failure but the SIP won’t charge anything. If you miss around 3 SIP instalments, it can cause the cancellation of SIP and you have to reactivate with the help of AMC. The invested amount will still gain returns according to your Mutual Fund SIP.
It’s the way of earning an amount that is not only through the principal amount but on the total interest rate also. It can also be defined as “Interest on interest”. It can greatly boost your earnings from the investment.
Rupee Cost averaging means, you keep doing investment of a certain fixed amount even in market fluctuations. This leads to you buying a higher amount of units, when the amount of every unit is low and on the other buying less number of units when the prices of every unit is high, therefore averaging the cost of the product throughout the time. This helps you to save from the market fluctuations and further staying away from timing investments in the market.
SIP stands for Systematic Investment Plan, which defines investing in a one or many Mutual Fund(s) in a defined disciplined and systematic manner. This is the proper way of investment, where you invest a fixed amount in a particular mutual fund in different time frames like quarterly or monthly into your dezired mutual fund plan. You can also do fixed auto debits from your bank for mutual fund instalments. Through that investment strategy you acquire NAV or Net Asset value. The more you invest, the more you get the quantity of units of that Mutual fund SIP and thus helps in reducing the costs down under the rule of rupee cost averaging. The SIP is a constant investment, which is less volatile during the market ups and downs and further constant investments.
Yes, you should invest in SIP Mutual Fund for long term as it’s benefits under rupee cost averaging & power of compounding. It also helps in doing investments without worrying about the market volatility. It will help in future investment purposes like buying a house, children’s education etc. although, you should invest in SIP considering your risk appetite and your asset allocation.
This is not true. All Mutual Fund SIP do not provide tax benefits. Only the SIP that invest their funds into equity funds get the tax rebate under the section 80C of Income Tax act. The maximum deduction claimed is of Rs. 1.5 Lakhs and further should invest in ELSS SIPs.
-
Follow these steps for online SIP investments
- Choose a type of Mutual Fund that suits your needs like your investment scenario, risk factor and your budget.
- Register on online forums like Wealthcare Securities.
- Provide basic identification details like AADHAR card details, Pan Card Details and other details.
- Now, select your investment amount and the duration of the instalment of that mutual fund and you can do auto-debit as well.
- Now start your mutual Fund plan through the Mutual fund SIP and you can track your info online.
Systematic Investment Plans or SIP risk factors depend generally on the types of Mutual Fund you are investing in. Mutual Fund investments are subject to market risks. Not as volatile as the equity fund or shares but the market fluctuations are directly linked to the return of the amount. Choose the SIP according to your risk taking capacity and investment budget.