What is Systematic Investment Plan?
We all have various financial obligations. Some of them like daily needs, school fees, etc involve the major outgo of your cash. Others like trip for your family or buying a fancy gizmo entails a one time payments for which money can be relatively easily collected. But for long term goals like retirement or purchasing a home require you to save and invest for many years. Yet irrespective of the amount involved and the time horizon, planning and investing money systematically and regularly enables you to sail through these obligations. A SIP could prove to be a simple and effective solution toward achieving these goals.
A SIP is a method of investing in mutual funds, by investing a fixed sum at a regular frequency, to buy units of a mutual fund schemes. It is quite similar to a recurring deposit of a bank or post office. For the convenience, an investor could start a SIP with as low as Rs 500; however this amount may differ from one fund house to other.
Benefits of Systematic Investment Plan
1) What is your equation to investments:
EARN->SPEND->SAVE OR EARN->SAVE->SPEND
The first is a wrong way of investing. You should be saving in a disciplined manner and SIP enables you to follow the second, which is the correct equation of investments.
2) Power of compounding: SIP make sure that you are not only benefited on your investment but you also get returns over the interest which in overall will result generating greater returns.
3) Easy, Flexibility and Liquidity: SIP is easy to start, manage and stop. It gives you flexibility to choose a desired scheme or to with draw in parts. And with conditions you have the money for contingency and emergency use.
To check complete list of benefits – you must read this article “Benefits of Investing Systematically.”
Best Systematic Investment Plans in India
||3 YearsInvestment 36000||5 YearsInvestment 60000||10 YearsInvestment 120000||12 YearsInvestment 144000|
|DSP BR Equity Fund||30||55142||22||103852||32||656368||28||890730|
|Franklin India Blue Chip Fund||28||54785||20||98935||29||549491||27||860441|
|HDFC Equity Fund||39||61979||26||112626||34||721916||32||1142897|
|HDFC Top 200 Fund||34||57909||24||109045||33||706670|
|ICICI Prudential Growth Fund||25||51186||16||90158||25||437115||22||616589|
|Reliance Growth Fund||29||54014||21||100716||38||901404||35||1407815|
|Reliance Vision Fund||25||51789||17||91941||33||677154||31||1078457|
|SBIMagnum Global Fund||29||54249||16||88337||31||607379||26||793162|
|Sundaram Growth Fund||24||50576||15||88069||25||458342||22||617858|
|Tata Pure Equity Fund||27||52625||19||95385||29||554004||25||727228|