1- Systematic Investment Plan (SIP):

Systematic Investment Plan (SIP) is a way of investing in mutual funds through which an investor can invest a fixed amount in mutual fund scheme of his/her choice at regular intervals.

Like a Recurring Deposit, an investor can invest fixed amount at regular intervals (monthly or quarterly) through SIP. Rather than investing a large amount one-time through lump sum mode, more investors now prefer to invest smaller amounts regularly through the SIP mode. You can start investing through SIP in a mutual fund scheme with an amount as low as Rs 100 per month.

BENEFITS OF INVESTING THROUGH SIP:

Best SIP Plans for the Year 2022:

Fund NameMonthly Investment3 years Return;
HDFC Balance Advantage Fund500014.39%
ICICI Prudential Bluechip Fund500019.41%
Kotak Standard Multicap Fund500014.15%
Motilal Oswal Focused 25 Fund500020.01%

https://www.hdfcsec.com/systematic-investment-plan-sip

SIP IS BETTER FOR TAX SAVING :

Is SIP tax free?

If a SIP of an equity fund is held for less than 12 months, there will be short-term capital gain taxable at 15%. But if a SIP of a debt fund is held for 36 or more months, then there will be long-term capital gain taxable at 20% after indexation of cost.

How is SIP calculated?

In an SIP, a predetermined amount is invested in the mutual fund every month. In a lump sum deposit, the amount invested is a constant figure on which the return is calculated.

NEGATIVE SENTIMENTS OF SIP :

  • SIP returns are lower in consistently rising markets.
  • Limited options of SIP dates.
  • Only Pre-defined Fixed Amount can be Invested by SIP.
  • Stopping intermediate payment in SIP.
  • Delay between actual application & start/stop of SIP.

Author: sapna panth

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