3 Reasons to Start a SIP today


Investing in mutual schemes using SIP is being preferred and chosen by many. Do you too want to invest in SIP but are skeptical? Read on to know why you should start a SIP.

What is SIP?

A systematic Investment plan, also known as SIP is a method with which you can invest money in mutual schemes.

SIP allows you to invest a fixed amount of money in your choice of mutual funds on a monthly basis. The said amount is automatically deducted from your bank account every month and goes into your mutual scheme.

Reasons to Start a SIP:

1) Start Small and Be at Ease

With SIP, you can start with an amount as low as Rs. 500. As hard as it is to believe, the statement is actually very true. You won’t have a hole in your pocket with SIP even when you’re on a tight budget.

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With rupee cost averaging, you can buy more units when markets are low while getting fewer units when the markets are high. This will avoid the headache of you having to worry about the markets going up or down and will eventually minus your risks.

2) Skip or Stop the SIP Anytime

Unlike Recurring deposits, SIP does not put a fine or penalty charge on you when you stop it. Deciding to stop a SIP is not subjected to any disadvantages. According to your choice, you can either get the deposited amount back or just let it stay invested.

Even if you don’t have the required or enough balance in your bank account for the next SIP, there are no problems. Without any fines put up against you, you can continue with the next SIP next month.

3) Grow Your Wealth with Power of Compounding

If you thought that all you get from SIP are monthly returns, then you are wrong. SIP adds the monthly returns you get to the actual amount which is further invested again. This is the power of compounding. Over a period of time, your wealth is bound to grow expeditiously with the power of compounding.

Also Read:-Significance of pre-planning in running business ventures


Author- Achal Chaurasia

A young businessman who has been in the line of entrepreneurship for quite a few years. He is an active learner and loves to know more about new technological developments coming up as well as how they can be put to great use to yield better results for society.

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