Gift Your Loved Ones With the Benefit of SIP this Christmas Season
Christmas is round the corner, and with the festivities in full swing, you must have spent a good sum of your savings on purchasing gifts for your family and friends. However, did you ever thought about presenting your loved ones with something that would fetch higher returns in the future? If not, then we have the best solution for you in the form of Systematic Investment Planning (SIP). For the ones, who generally invest in the Fixed Deposits (FDs), Recurring Deposits (RDs), or even traditional insurance plan, SIPs can prove to be a better option.
In this blog, we have shared the length and breadth of what actually SIP is and how can you make the best use of it to generate wealth in the future. Read further to know more on the same.
Defining Systematic Investment Planning (SIP)
Systematic Investment Planning is a planned approach to making investments in a predefined manner. Under this scheme, an investor is allowed to invest a certain amount of money at regular intervals, i.e., either weekly, monthly, or quarterly, etc. Moreover, it is a flexible and easy way of investment where your deposited cash is auto-debited in your bank account and invested in various mutual fund schemes. In addition to this, you are allocated a certain number of units based on the ongoing market rate which in general terms is referred as ‘Net Asset Value or NAV’ for the day.
Benefits of Systematic Investment Planning
Systematic Investment Planning is beneficial for those who do not have much knowledge on how they can build wealth through investments. Since this is an open-ended scheme, investors can choose to take out their money whenever they feel like, and can even increase or decrease the amount according to their choice. Not only this, there are several other benefits offered by them which are listed below:
- Rupee-cost averaging: Most of the investors often get confused during the times of volatile market about what would be the best time to invest and achieve benefits and in such a case, rupee-cost averaging will let you make the best choice. For someone who is a regular investor, your money would fetch more units when the price is low and lesser when the price is high. And during the volatile period, it may allow you to achieve a lower average cost per unit.
- Power compounding: According to this rule, the sooner you start investing, the more time is required to make your money grow. For instance, if you started investing Rs. 10000 a month on your 30th birthday, in 20 years time you would have put aside Rs. 24 lakhs. If that investment grew by an average of 7% a year, it would be worth Rs. 52.4 lakhs when you reach 50 years.
- Disciplined gains: Discipline ensures your success in investments. And thus, online SIP investments fulfills this part as well since you will be bound to invest regularly from time to time. Investing in SIPs enables you to achieve financial objectives the way you want.
- Long-term gains: Rupee-cost averaging and the power compounding make it possible for the SIPs to deliver attractive returns on your invested finances.
- Ease of convenience: SIP is a completely user-friendly process and a hassle-free mode of investing your money in mutual funds.
With in-depth research and analysis, our fund analysts suggest you to invest in SIPs if you do not have the resources to pursue active instruments. MySIPonline wishes you the best of the season greetings and encourages you to invest in SIPs for growing wealth for your future. Moreover, our certified financial advisors would also recommend you to gift the benefits of SIPs to your loved ones, during this festival. So, start investing now and get assured of a secure future. Have an amazing festival time!
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