What is Systematic Investment Plan (SIP) and Its Benefits

SIP or Systematic Investment plan is a smart method of investing. This method of investing

builds greater wealth through the small contributions.  It has become very popular due to its

obvious benefit and ease. Today, almost all the mutual  fund companies give the option of

investment through the systematic investment plan. Even mutual fund companies relaxed some

of their criteria for SIP.

What Is SIP or Systematic Investment Plan

Suppose, this year, you want to invest 1.2 lakh  in the Axis long term equity fund for the tax

saving. You can invest in this fund through these two methods.

1. You save Rs 10,000 every month for the investment. You keep your saving in the saving

account and invest the total 1.2 lakh at the end of the year.

2. You start investing from today and invest Rs 10,000/month in axis long term equity fund

directly.

In both of the method, you invest total 1.2 lakh in a year.

The first way of investing is called the lump sum investment. While the second method is

Systematic Investment Plan.

This is a partnered post.

Updated Date: Dec 30, 2016 17:45:23 IST