SIPs are undoubtedly one of the most favored investment tools available. The popularity of these mutual funds has risen constantly. This article throws some light on the advantages of these types of mutual funds. Keep reading.
Building and growing your personal finance is not an easy task. This is why banks have come up with new and better ways to help you save your money while gaining something extra in the process. This is why SIPs are extremely popular. Systematic Investment Funds or SIPs, are funds where you can invest monthly for short or long term gains on your savings.
With banks and financial institutions heavily promoting SIPs, more and more people are looking to invest in them. However, before you invest, you need to know why a SIP is a good choice. Here are few advantages of it:
Convenience
If there is one thing that is universally known about SIP mutual funds, it is that they are very convenient. SIPs look towards making your life easier by auto debiting the amount from your account each month. This means that you do not have to worry about missing out on a monthly investment. Instead, you can sit back and relax while your investments bear fruit!
Starting early
There is a common misconception with investments that you cannot get good returns unless you invest lump sum amounts. This myth is effectively shattered by SIPs. With a SIP, you can invest as little as five hundred rupees every month and see it get great returns in the long run. This is a great investment to hop on board from early on too!
Don’t have to worry about the market
When you invest in equity funds, you need to keep a tab on the market to ensure that you do not lose all your money and pull out at the right time. This is not a problem you need to face with SIPs. Your fund manager invests your money and also takes care of its growth for you! All you need to do is find the right SIP fund to invest in.
Lower the risk, happier the customer
Investments can be tricky to understand and even more tricky to deal with. People look towards the lower risk investments to get safer returns and SIP is a great place to start with. When you invest in a SIP, your fund manager takes your investment and spreads it across different funds. This means your portfolio will not take a huge hit no matter what the market seems like and you will be able to make steady returns as well.
Tax benefits
Another advantage of opting for a SIP is the tax benefits. Not only do you get good benefits from the government, but the taxes are filed on your capital gains and that too on a first in first out basis. So, this is also a great reason to start saving your money!
SIPs are definitely one of the best ways to go about if you are looking to start investing your savings. With so many advantages to it, SIPs are certainly popular in the financial market today too. If you are wondering when the right time is to take the plunge, make sure you check with your fund managers and hop onto the SIP trend! Happy Investing!