What is sip? And What is the meaning of sip?

If you want to have a hassle free and smart way of investing money in mutual funds then SIP is the best way to do so.  Let’s find out what is sip?

What is SIP?

SIP a.k.a  systematic investment plan is very flexible and easy process investment plan which allows your money to be auto-debited from your bank account. After being auto-debited, the money is invested in a particular scheme of a mutual fund. This feature will help you to invest a certain amount that is pre-determined in a regular interval of time. This weekly interval can be on a quarterly, monthly or weekly basis. Have a better future by trusting and saving in the systematic investment plan. Now let us discuss what is the actual meaning of sip? How can it be beneficial to you?

What are the benefits or meaning of Systematic investment plans?

There are various advantages of SIP which are listed below.

  • If you invest in SIP you will be able to save on a regular basis. This is called disciplined saving and it is important when you want to achieve certain financial objects.
  • Flexibility is another advantage of the systematic investment plan. It is advised that SIP investment should be continued in a long-term time period but it is not a necessity. The investors have the power to put an end to the plan whenever they wish. The amount invested can also be increased or decreased as per the choice of the investor.
  • Long-term benefits are gained from systematic investment plan. If you have opted for a long-term investment plan with SIP then due to the compounding factor and also the cost of rupee averaging you are likely to get a handsome amount of sum as a return.
  • This is a very convenient method of investment. Auto-debit facility is provided by systematic investment plan which makes sure that you never fail to make any payment.
  • The implementation of SIP can be done in both online and offline process. The option of a paperless transaction is provided to you when you opt for online systematic investment plan which makes it very easy and hassles free.
  • In order to get an automatic investment that is uninterrupted, you can also link your SIP details with your bank account.

Before making an investment in the systematic investment plan, make sure that you fully understand the meaning of sip. Contact your financial advisor and ask him or her, what is sip. Understand the concept and meaning of sip then make an investment. But one thing is for sure that if you invest in this then you will be benefited from this investment plan. Hope we have cleared all your doubts regarding what is sip? We will come up with another post to quench your doubts regarding systematic investment plan.

So get ready to invest in Mutual funds use this free SIP calculator toll to calculate return on investment