Systematic Investment Plans, or SIPs are simply a convenient way to invest in Mutual Funds month on month. You select a fund, choose a date, choose an amount to invest, and the period for which you would like to put in money. Once you have selected all of this, you need to fill a few forms and the money will be automatically placed in your mutual fund account from your bank account every month on the date selected by you.
A Systematic Investment Plan is a matter of convenience and not an obligation. you can stop the investment at any time, you can withdraw the invested money at any time, and you can invest more money at any time.
An SIP can also make you very rich. For example a Rs. 5,000 per month SIP for 20 years on the 7th of every month will help you invest Rs. 12 Lakhs (5000 x 12 x 20) in small monthly amounts. And your money will grow because SIPs can be very profitable. An investment of Rs. 5,000 per month over 20 years should give you about Rs. 80 Lakhs (15% annual return). These gains are tax free and uncapped. If I calculate that MF SIPs give you returns similar to what they have done in the last decade and a half, then you should make Rs. 1.5 Crores in 20 years (20% annual return). But there are no guarantees on returns.
To begin an SIP takes 10 minutes. You need to:
1. Complete a KYC
2. Select a fund
3. Open a folio
4. Request an SIP.
Write to us if you want to start an SIP today and we will help you with all four steps.
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