Features that make SIP a prudent investment?
Systematic investment plan has made investing mutual fund convenient and affordable. As we know to invest in a mutual fund can potentially fulfill your financial goals for which need regular and long term investment. Not everyone can afford the lump-sum amount so SIP proves to be a handy option of investment. Systematic investment plan has become a vital way of mutual investment with its exciting features. So, without further ado, let us take a look at some of the exciting features that make SIP a prudent investment.
The reason many investors opt for SIP is that it’s convenient. With a mere amount of RS 500, you can start investing in any type of mutual fund scheme. This amount will be auto-debited from your account on a pre-determined date which is convenient. Further, it is possible to increase the SIP amount over the period. If you are able to pay more you can easily increase the SIP amount without any problem. You can skip SIP with one month notice period.
When it comes to SIP, the investors need not worry about the market fluctuation. As and when the market is in decline, fewer units are bought and when the market is rising, more units are bought. Although SIP does not guarantee a profit, it would help eliminate the negative effect of the volatile market. It is so beneficial when the market is fluctuating where one can suffer a financial setback.
Investing at a young age is not only a good habit but also it is a sign of regularity and punctuality. When you invest from the early days of your career and stay invested in mutual funds through SIP for a longer period, it benefits you with the power of compounding. With this, you can accumulate a substantial amount of wealth within targeted years. Besides, you will be able to achieve your desired financial goals effortlessly.
As one might have figured it out, investing in SIP cultivates a habit of disciplined saving. With regular amount being invested periodically, a healthy habit is induced of disciplined investing which will benefit you in the future for achieving financial goals. In the future when you make any big purchase it would be a lot easier for you to pay down payment.
That being said, investing in SIP is indeed a prudent choice. If you are not sure about monthly investment, you can use the mutual fund SIP calculator. With this, you can calculate wealth gain, expected returns monthly SIP amount. You will get a rough estimate of your investment and its returns. It is convenient for novice investors. With all these features, it is safe to say SIP is a prudent choice of investment with loads of benefits.
