SIP mutual fund is a low-cost, tax-efficient way to invest in mutual funds. It allows you to choose from a wide variety of mutual funds at no cost and with investments starting from just Rs 500. An investment of Rs 10,000 in a SIP Mutual Fund will make it grow to Rs. 50 lakhs in 15 years and Rs 1 crore in 20 years at an assumed annual return of 12%.
This blog post will provide an overview of a SIP mutual fund and how you can invest in a SIP.
What is a SIP Mutual Fund?
A Systematic Investment Plan or SIP is an investment plan offered by mutual fund companies where the buyer decides a fixed amount to invest in SIP every month. The investor can opt to invest in both equity and debt mutual funds through the SIP route. Here are some of the key advantages of a SIP mutual fund:
- SIP can be very helpful for people who don’t have time to monitor the stock market every day.
- It allows you to invest in mutual funds and make money from your investments.
- SIP is similar to recurring deposits (RD) as both involve regular periodic payments.
- SIP typically gives better returns than fixed deposit schemes or recurring deposit schemes.
How to Invest in a SIP?
One of the best ways to save money for your future is to invest in a SIP mutual fund. These are extremely flexible investment choices that can be easily included in your portfolio. You can start investing by opening an account with any bank or asset management company.
- You can begin a SIP mutual fund investment with as low as Rs 500.
- You can easily open your SIP account with any of the reputed banks.
- The common investment advice in SIP is to hold it for an extended period.
Returns in SIP
No one can tell you the exact returns in a SIP that an individual may get monthly or yearly. However, the SIP mutual fund is certainly capable of producing better returns than RD or FD. Most of the time, an individual receives a minimum of 10% return in SIP, but it is dependant on the market performance of the mutual funds.
SIP in India
Nowadays, SIP in India is a trending investment option as people are becoming more financially literate. In India, the annual inflation rate is about 6%, and our savings are unable to combat it. So, SIP mutual fund investments are a good option that usually offers a minimum 10% return and a hedge against inflation.
One should start planning for SIPs as early as possible to achieve the highest returns on savings and to create wealth. Most financial advisors recommend SIP as the best retirement planning option. There are many companies and websites that can help in SIP planning.
To Wrap Up
If a SIP mutual fund looks to be an ideal investment option for you and you want to explore it further, you should consider PGIM India Mutual Fund. It offers various options in SIP mutual fund investments that are aligned with your financial goals. For an instant calculation of your investments and likely returns over time, you can use the Mutual Fund Calculator on the PGIM India website. This way, you can begin to save smartly for your future, without it costing much in the present.