What Is SIP Investment Plan and Its Benefits

In present date when the rates of everything are touching heights of sky, every single individual wants to earn good and wants to have a stable saving for their future when they are not working or we can say during their retirement. But many of us lack proper guidance and hence end up without saving proper amount.  Thus, if you also lack proper guidance and searching for a proper solution for your future saving then SIP Investment Plan is answer to all your questions.

Now when we know Systematic Investment Plan is the answer, let us move forward to know about in detail. So what is SIP Investment Plan?

SIP or Systematic Investment Plan is a means to invest in mutual funds with smartness and without any hassle. Under this you have to submit a predetermined amount as investment at regular interval of time depending on the plan you choose – weekly, monthly, quarterly etc. With SIP you develop habit of saving and hence saves amount for your better future.

How SIP Works

The best part about this investment plan is that you really don’t have to worry about market conditions as money is automatically invested (auto-debited from your bank account) in scheme without any extra efforts at your disposal.

Benefits of Using Systematic Investment Plan

Regular Saving

The first and most crucial benefit of SIP Investment Plan is that it helps you to do regular saving. With this mode you develop habit of saving regularly which helps you to built wealth for your future.

Long Term Gains with Compounding

This scheme provides benefits of compounding as you invest for a long period of time and earn returns on the returns earned by the investment done by you. Thus, this small regular investment assists you to generate a huge amount that ultimately aids you to accomplish your financial objectives.

SIP Investment Plan

Convenience

With this scheme you can submit post dated cheques or even simpler you can allow auto-debit from your account thereby providing a standing instruction to your bank to do so. Also, with the facility of periodic statements of your account you can easily track the progression of your funding done.

Investment with Little Amount

The best thing with SIP’s is that it allows you to start even with the smallest amount of Rs. 500. It helps individuals of all financial status to put in their money for this scheme and even don’t make them feel the burden of paying any lump sum amount.

Tax Benefits

Along with all mentioned benefits SIP’s also provides tax or taxation benefits. It provides tax benefits as this is taxed for capital profit on the basis of first in first out.

No Need to Time the Market

In SIP there is no need to give time to market as it works on Rupees Cost Averaging. Rupees Cost Averaging is a way where you invest regularly a fixed amount and which as an outcome assures that you purchase more stocks(shares) when prices are low and less when prices are high.

Post Author: Jennifer Slegg

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