What is an SIP?
A Systematic Investment Plan (SIP) is a way to invest in mutual funds by contributing small amounts at regular intervals. In fact, you can start with as little as Rs. 500 and choose how often you'd like to invest – monthly, quarterly, and so on.
Benefits of SIP Investing
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Low entry point:
Start with as little as Rs. 500. -
Beginner-Friendly:
New investors can start gradually, avoiding big market swings. -
The power of compounding:
With SIPs, your money grows steadily over time with the power of compounding.
Why opt for an SIP to invest in mutual funds?
SIPs instill financial discipline by committing to regular investments. This helps you stay focused on long-term goals instead of trying to time the market. Moreover, SIPs are affordable and let you start with a modest investment, unlike lumpsum investments that require a large capital. Investing in SIPs can also reduce the impact of market ups and downs through rupee-cost averaging, thereby offering relative stability.
SIPs also provide transparency as they are managed by professional fund managers under regulatory oversight.
Investors can use Bajaj Finserv SIP calculator to calculate the future value of investment they can expect from SIP and how much they need to invest periodically to meet their financials goals.
Features of SIP:
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Flexibility
: Adjust investment amount easily as needed. -
Convenience
: No manual transactions needed. Automate SIPs using auto-mandate directly from the bank. -
Pause or stop option
: Temporarily pause or stop SIP when life gets unpredictable. -
Avoiding timing the market
: No need to predict markets; stay disciplined and stress-free.
Disclaimer: The calculator alone is not sufficient and shouldn't be used for the development or implementation of an investment strategy. This tool is created to explain basic financial / investment related concepts to investors. The tool is created for helping the investor take an informed investment decision and is not an investment process in itself. Mutual Fund does not provide guaranteed returns. Past performance may or may not be sustained in future and the same may not provide a basis for comparison with other investments. Investors are advised to seek professional advice from financial, tax and legal advisor before investing in mutual funds.
Invest in SIP: Power of starting early
The power of starting early with a Systematic Investment Plan (SIP) lies in the concept of compounding. Compounding is like a snowball effect for your investments.
When you invest money regularly, even if it's a small amount, it earns returns. Then, these returns are reinvested along with your initial contributions. Over time, this process repeats, and your investments begin to generate returns on returns.
If you are looking to opt for SIP investment plans, you can consider investing in Bajaj Finserv Flexi Cap Fund. This scheme is based on a first-of-its kind megatrends strategy that makes it a future-ready investment.
Goal-oriented SIP investing
- To make the most of SIPs, define clear financial goals – whether it's a vacation, building an emergency fund, buying a car, or saving a specific amount.
- Create a plan outlining how much to save and invest each month, prioritizing debt repayment, and building an emergency fund.
- For mutual fund investors, goal planners can be valuable tools to understand expected returns and future values.
- Regularly review and adjust your plan to align it with your financial goals and circumstances.
Frequently Asked Questions
The minimum SIP investment amount can be as low as Rs. 500, but it varies depending on the mutual fund scheme.
Compounding means your money earns returns on both the initial investment and the returns already earned, accelerating wealth growth.
Rupee cost averaging means buying more units when markets are low and fewer units when markets are high, reducing the impact of market volatility in SIP investments.
- Bajaj Finserv Asset Management Limited has been referred to as Bajaj Finserv AMC.
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