How to invest in SIP?
You can start an SIP by selecting a mutual fund or stock where SIP mode of investment is permitted. Identify an asset based on your investment goals and risk appetite. Once the asset is identified, decide your investment duration. Ideally, investment duration should match the goal duration. Investing regularly is paramount as adhering to it helps in achieving the goal.
Can SIPs help in meeting financial goals?
SIPs (Systematic Investment Plans) helps in achieving your financial goals like child's education, expenses for marriage, buying a house, creating a corpus for a secured retirement life, etc. However, it is prudent to start early in order to minimise the investment amount needed to achieve your goals.
How to become a Crorepati through SIP?
The key to reaching the goal of becoming a Crorepati is to start early. So, start your SIP today. The early you start the more you benefit. If you are 20 years old and you want to accumulate Rs 1 crore by the time you become 60, you just have to invest Rs 1,581 per month to accumulate this amount. For calculating this, we have assumed a return of 10 per cent per annum.
What is the minimum investment in SIP?
The minimum investment in most mutual funds is as low as Rs 100, which enables small investors to purchase this option.
Can I pause my investments in SIP?
You can pause your investments in SIP by filling the SIP pause facility form and submitting the same at the branch of the AMC (Asset Management Company) or any of its Registrars offices. Investor needs to mention the SIP pause start date and SIP pause end date in the form. SIP restarts immediately after the SIP pause end date. If the SIP tenure is completing during the SIP pause date, the SIP will be auto terminated.
Is SIP tax free?
No, SIP returns are taxable. However, SIP in tax saving mutual funds called Equity Linked Savings Scheme (ELSS) will give you tax benefit under section 80C of the Income Tax Act.
Do SIPs give you guaranteed returns?
No, returns from SIPs are market linked. Hence, they don’t give you guaranteed returns.
Can I modify my SIP amount?
SIPs like Flexible SIP gives you the option of modifying the SIP amount. However, in the case of normal SIPs, top-Up SIPs, this facility is not available.
How long can I invest in SIP?
You can invest in SIP for as long as you want. There is no predefined time limit. Perpetual SIPs give you the option to continue SIPs indefinitely.
What factors should I consider while selecting a mutual fund for SIP?
There are multiple factors like investment objective, fund’s consistency in generating excess returns over benchmark index, its performance across bull and bear markets, expense ratio etc which needs to be considered while selecting a mutual fund for SIP. Consistency in delivering excess returns aka Alpha across market cycles is a sign of a good performing fund.
How can I calculate the returns from SIP?
You can use the online SIP calculator for calculating the returns from SIP. Just provide the amount that you want to invest, investment duration, frequency of investment and the expected return per year. Based on the inputs, the SIP calculator will give you the returns from your SIP investment.
Is SIP good for all types of investors?
SIP is good for any type of investor. However, the benefits of SIP are realized the most when it is initiated early. Hence, it is prudent to start investing in SIP at an early age.