Saturday, October 16, 2010

What is Systematic Investment Plan (SIP)?

It is popularly knows as SIP, it is a simple method used all over the globe. It is very close to recurring deposits. It involves investing a fixed amount on a regular basis for a fixed period in any scheme. A SIP can be started even by investing ` 500 p.m. (in most of the schemes)


Advantages?



-          Helps you to invest disposable funds each month.
-          Disciplined savings
-          Convince and Flexibility
-          Gives you the benefits of rupee-cost averaging
      Below is an example of someone investing lump-sum with one doing a SIP


-          Relieves you of trying to time the market
-          Helps you to reach your financial goals
-          Managed by qualified professionals
-          Power of Compounding



 How does one apply for SIP?

-          Fill up a single SIP form, and a single application form.
-          Draw post-dated cheques (minimum 5 cheques).
-          Minimum SIP amount can be as low as Rs. 500 (it varies from Fund House to Fund House)
-          Auto Debit Facility

A SIP reduces the average cost of investing in any fund. SIP may not seem appealing in the start but when one looks back over the years it’s very fruitful and can give handsome returns.

A monthly SIP of `1000 p.m. at the rate of 9% would grow to ` 6 lacs (approx) in 10 years, ` 17 lacs (approx) in 30 years and ` 44 lacs (approx) in 40 years.

So start a SIP NOW!!!


2 comments:

  1. Good Info. Thanks

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