SIP allows you to invest a certain pre-determined amount at regular intervals. (Weekly, monthly, quarterly, and so on ...). SIP is a systematic approach to investing and helps you to inculcate the habit of saving deeply in your mind and build wealth for the future.
How does it work?
SIP is a flexible and easy investment scheme. Your money is automatically deducted from your bank account and invested in a specific mutual fund investment scheme.
You are assigned a certain number of units based on the current market price situation (called NAV or Net Asset Value) on the day of investment.
Each time you invest money, additional units of the scheme are purchased and added to your account according to the market price. Therefore, as the units are purchased at different prices, investors will benefit from the power of rupee-estimated average and interest aggregation
With volatile markets, the majority of investors are skeptical about the best time to invest and try to see when they will enter the market. Rupee value averaging allows you to get out of this speculative game.
Since you are a regular investor, your money will earn more units when the price is lower and less units when the price is higher. Allows you to achieve a lower average price per unit during periods of instability.
Interest Collecting Albert Einstein once said, "Collective interest is the eighth wonder of the world. Whoever understands it, they make money, whoever does not understand, they pay." The rules for compounding are simple - the sooner you start investing, the more your money will grow.
For example you earn Rs. On your 40th birthday in 20 years, if you have started investing Rs. 24 lakhs can be taken alone. If that investment grows by an average of 7% a year, by the time you reach 60, it will be worth Rs. 52.4 lakhs.
However, if you started investing 10 years ago, you will get your Rs. 10000, in 30 years Rs. 36 lakhs would have been added. Assuming the same annual growth average of 7%, you would earn Rs 1.22 crore on your 60th birthday - more than double if you started ten years later.
Degree Savings Discipline is the key to successful investments. When you invest through SIP, you are engaging yourself in regular savings. Every investment you make is a step towards achieving your financial goals.
Long-Term Gains:-
SIP has the inherent potential to deliver impressive returns in the long run due to its monetary value averaging and aggregation capability.
Convenience SIP is a seamless investment method. You can issue status orders to your bank asking them to facilitate automatic debit from your bank account. SIP has proven to be an excellent investment plan for retail investors who do not have the resources to follow the process of investing.
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