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Market Crash: Should you stop your SIP?

For novice retail investors, witnessing erosion in the capital invested is hard to tolerate and instead of withstanding the market turmoil and waiting to see the notional loss turning into gain on market recovery, many investors having low risk tolerance either redeem their investments or stop their investments through systematic investment plan (SIP).

 

But is it a right decision to stop investing or redeem existing investments in low market to stop further loss?

 

To understand the implications of discontinuing SIP or redeeming your investments when the markets are down, you should compare the equity investment with investments in physical assets like gold.

 

If you sell gold at Rs 30,000 per 10 gram that you bought when the price was Rs 35,000 per 10 gram, you will lose Rs 5,000. But if you wait till gold prices increase to Rs 40,000, you would gain Rs 5,000 by selling it at high prices. Moreover, instead of selling gold at Rs 30,000 per 10 gram, if you buy another 10 gram and then sell the 20 gram gold at Rs 40,000 per 10 gram, you would gain Rs 15,000.

 

So, when the price of equity falls, you should invest more instead of redeeming your investments, because redemption in low market would turn the notional loss in real loss.

 

Similarly, you shouldn’t stop your SIP in low market. It is because, under SIP, same amount is invested in equal interval and when NAV of funds are lower at low market, you would get more units. As fund is denoted by the product of NAV and number of units (i.e. NAV x No. of units), higher the number of units you accumulate, the higher will be the fund value when NAV moves up in high market.

 

So, to get a higher return from your investments in equity MF, you should never stop your SIP at low market and if possible, make some additional investment to acquire more units to maximise the return.

 

Source: financialexpress

What Makes Mutual Funds An Excellent Investment For Young People?

Your early twenties is a phase when you are just a year or two old in your career and slowly beginning to understand the importance of savings and investment. Hence, many youngsters like you are eager to have financial freedom and are looking for ways to use their money smartly. The agenda is to make money work for you and thereby increase your savings and earnings.

Mutual Funds are often the most sought-after option. A simple investment vehicle, mutual fund schemes allow amateur investors to choose among different varieties to create wealth. Besides, looking at the current market trend, mutual funds are one of the best investment routes for young and new investors. Since there is no one-size-fits-all rule when it comes to investment strategies, the earlier you start, the better you’ll learn to manage money.

Let’s discuss why Mutual Funds will prove to be a beneficial investment option for young investors like you:

 

Simplicity

 

Investors in their 20’s are only novices in their careers. Hence you may not have enough knowledge and expertise to make large-cap investments. Having said this, it is not that young people are incapable of handling complex financial decisions. Still, Mutual Funds are an easy-to-understand investment vehicle even for those who are starting with the ABC of savings. Because of easy access and fairly comprehensive terms, mutual funds are the best choice for first-time investors.

 

Diversification

 

Mutual Funds hold plenty of securities, like stocks and bonds, under its purview to enable an investor to diversify their investment risk. As a young investor, not only can you enhance your financial portfolio by investing in more than one fund, but you can also lower the risk of your overall investment. In case of an unpleasant economic event, dividing your savings into something as low as even one or two funds will defend your money against a financial crisis. And if the value of your stock falls and the value of your bonds rises, it offsets losses that could otherwise wipe out an entire portfolio in financially tumultuous situations. Since Mutual Funds have a broad market exposure, they are the most advisable investment option for young investors.

 

Accessibility

 

When you begin your investment journey, you neither have the money nor the financial skills to take risks. But there are quite a few investment options under mutual funds that require very little money and can be bought without the help of a broker. As a beginner, you can easily open an account within minutes with HDFC Bank via InstaAccount and begin your investment journey with HDFC Bank Mutual Funds. You can create a portfolio with options that best meet your investment goals. Choose between wealth creation, children’s fund, and retirement planning to meet long term goals, while tax-saving and regular income is best to meet short-term requirements.

With HDFC Bank, you can opt for Equity Funds, Debt Funds or SIP (Systematic Investment Plans). Or by opening an Investment Services Account, you can easily carry out transactions and have complete control over your Mutual Funds via NetBanking.

 

Tax Saving

 

Before blindly investing in a Mutual Fund, learn about your fund. Every category has its own risks and rewards that will help you decide whether or not it meets your saving goals. For instance, as a young investor who is just starting out in the professional space, tax-saving investments are a sensible choice. If the mutual fund you are investing in is an ELSS fund, you will reap tax benefits under section 80C. ELSS funds have a lock-in period of 3 years and are ideal to meet short-term goals. These investments offer the dual advantage of tax saving and better returns than traditional investment tools.

 

Bottom Line

 

Mutual Funds are a smart investment choice for all those are ready to go beyond Fixed Deposits and Recurring Deposits to increase their savings. Relatively simple to understand, Mutual Funds are a safe investment option because SEBI regulates it. However, mutual fund schemes are subject to market risk so always read the documents thoroughly before making a decision.

 

Source: Hdfc Bank

SIP vs RD: Which Is a Better?

Setting aside a part of your monthly income can be an interesting way to invest money when you know the scheme will safeguard your investment and build wealth to achieve your financial goals. So, if you are looking for a similar investment option, Systematic Investment Plan (SIP) and Recurring Deposit (RD) are the two most popular options that let you invest a fixed amount every month for long-term wealth creation.

 

An SIP is a provision to make an investment in mutual funds by setting aside a small amount of money monthly or quarterly rather than investing in a lump sum. On the other hand, an RD is an investment tool wherein you can deposit a fixed amount each month for a fixed interest rate and predefined duration. This article elucidates everything about these two investment options so that you can make an informed investment decision.

 

What is an SIP?

 

A Systematic Investment Plan (SIP) is an investment tool that lets you invest a small sum of money in mutual funds on a daily, weekly, monthly, and quarterly basis. It is a systematic approach to managing your investments. Depending upon the mutual fund scheme you choose, your invested money will be allocated in debt and/or equity. You can start an SIP with a minimum of Rs 500 a month. With a standing instruction, the SIP amount will get deducted from your registered bank account on a predefined date. You do not have to worry about market volatility and timing the market as you make small investments periodically, typically for the long term. With increased awareness about mutual funds, this disciplined manner of investment has been gaining popularity in India.

 

What is a Recurring Deposit?

 

A Recurring Deposit (RD) is a type of term deposit offered by banks. It lets you make regular deposits and earn interest on the investment. Due to the regular deposit factor and fixed interest rate, RD is one of the preferred saving-cum-investment instruments in India. Most banks in India offer RDs for a term that ranges between 6 months to 10 years. You can choose the term in accordance with your financial goal. The RD amount gets automatically deducted from your Savings Bank Account and is transferred to your RD account. The interest rate remains the same throughout the term and does not get affected by market volatility. On maturity, you receive the lump sum amount that includes your investment plus the interest earned. Most major banks in India offer to invest in RDs with as little as Rs 1,000. Since the rate of interest offered on RDs is equivalent to the rate of interest offered on Fixed Deposits, it earns you a decent amount on maturity.

 

Which is a better investment option?

 

Now that we have understood the basics of these two investment tools, let’s compare them on certain parameters to decide which option works the best for you.

 

1. Type of Investment:

 

SIP is a route offered by mutual funds to invest a fixed amount in a mutual fund scheme at regular intervals. You can choose between debt, equity, or hybrid mutual fund schemes depending on your risk capacity.

Whereas, in an RD, an investor contributes a fixed amount every month for a fixed rate of return. Unlike SIPs, RDs offer an interest rate that remains unchanged until maturity. That said, it neither takes advantage of the market conditions nor does it get affected by market volatility.

 

2. Risk Involved:

 

Depending upon the market conditions, the SIPs offer variable returns. Hence, it does involve the risk of returns and capital. However, the carefully chosen and long hold SIPs have consistently given good returns compared to the traditional methods of investment.

Since RDs offer a fixed interest rate, they are considered one of the safest investments for conservative investors who do not want to risk their capital and do not expect high returns.

 

3. Investment Frequency:

 

SIP lets you invest periodically, such as daily, monthly, weekly, and quarterly.

You can invest in an RD on a monthly basis.

 

4. Returns:

 

Returns on SIPs are based on the type of schemes you choose, such as debt or equity. Also, the fund you choose makes a huge difference in the returns.

The RDs offer fixed returns. However, the bank you choose for an RD makes the difference in the returns as the interest rates vary from bank to bank.

 

5. Tenure:

 

There is no fixed tenure for an SIP, but the minimum period is 6 months.

Most banks offer to choose RD tenure between 6 months to 10 years.

 

6. Liquidity:

 

In terms of liquidity, an SIP is a better option as it allows you to withdraw funds whenever you need without any charges.

Although RDs allow premature withdrawals, you will be charged a penalty for it.

 

7. Taxation:

 

The SIP investments and returns are exempted from the tax only if they are Equity Linked Saving Scheme (ELSS) funds.

Resident individuals below the age of 60 years with an annual income above Rs 5 Lakhs have to pay 10% TDS if the interest earned is more than Rs 10,000.

 

8. Investment Goal:

 

Depending on the fund and investment frequency you choose, an SIP can help you build wealth over a period. It can assist you in achieving long-term as well as short-term investment goals.

Since the interest rates offered on RDs are considerably lower, they cannot help you create wealth or achieve long-term investment goals.

 

To Conclude:

 

When choosing between SIP and RD, it is advisable to consider your income slab, risk appetite, investment tenure, and investment goal. A combination of carefully chosen SIPs can prove as a beneficial investment if you are open to taking relatively higher risks and ready for a longer investment horizon. However, if you want to minimise the risk, you should consider debt SIPs. If you do not want to risk your capital at all and not looking for high returns, you can consider investing in an RD. For your money to grow in a decent and interesting way, it is advisable to make an investment plan, based on your risk appetite, that includes SIPs as well as RDs.

 

Source: Personalfn

Which one is better? Daily SIP or Monthly SIP?

SIP is a systematic investment plan which not only helps to bring discipline in investment, but also helps to chalk out the short term market fluctuations. Mutual funds offer SIPs of various durations.

 

Mutual funds offer the facility of investing in mutual funds through the systematic investment plan or SIP. You may invest in mutual funds through (I) Lump-sum investments (ii) Systematic investment plan (SIP)

 

Are you confused about the interval of SIPs one should opt for? Please read on for the clarity.

 

Understanding the meaning of SIP

SIP is a systematic investment plan that brings discipline to your investments. SIP is a facility offered by mutual funds that allow the investor to invest a fixed amount of money periodically in a mutual fund scheme.

 

SIP is usually a better investment option than a lump-sum investment as it utilises market volatility to average out the cost of the investment. SIP would help you stagger your investment over intervals which makes them safer than lump-sum investments. SIP will enable the investor to buy more mutual fund units when the stock market corrects or crashes and lesser units when markets rise.

 

It helps you average out the cost of purchase of the mutual fund units over some time. This method has become widely popular as it uses the technique of ‘rupee cost averaging’ to maximise returns with time. Also, by consistently investing in equity funds through SIPs, you get the benefit of power of compounding, which gives a return on your returns. The discipline that SIP brings and maximising return would help the investor build a large corpus in the long-run, even with a small investment.

 

SIP is a systematic investment plan that brings discipline to your investments. SIP is a facility offered by mutual funds that allow the investor to invest a fixed amount of money periodically in a mutual fund scheme.

 

SIP is usually a better investment option than a lump-sum investment as it utilises market volatility to average out the cost of the investment. SIP would help you stagger your investment over intervals which makes them safer than lump-sum investments. SIP will enable the investor to buy more mutual fund units when the stock market corrects or crashes and lesser units when markets rise.

 

It helps you average out the cost of purchase of the mutual fund units over some time. This method has become widely popular as it uses the technique of ‘rupee cost averaging’ to maximise returns with time. Also, by consistently investing in equity funds through SIPs, you get the power of compounding benefit, which gives a return on your returns. The discipline that SIP brings and maximising return would help the investor build a large corpus in the long-run, even with a small investment.

 

SIPs are available for different durations as mentioned below.

 

Types of SIPs based on tenure

 

SIPs can be classified based on their tenure; generally, monthly and weekly SIPs are popular modes of investments.

 

Monthly SIP: A fixed sum is invested monthly in the mutual fund. These are the most commonly used types of SIPs.

 

Weekly SIP: A fixed sum is deducted every week and put in the mutual fund scheme.

 

Daily SIPs: A fixed sum is invested daily in the mutual fund.

 

Which type of SIP would be beneficial for you?

 

Studies have shown that SIP frequency, be it daily, weekly or monthly, has no major impact on returns. For instance, the difference in return between daily, weekly or monthly SIPs is negligible over time. However, you could struggle to monitor your investment if you opt for the daily SIP over the monthly SIP. You would be better off going for monthly SIPs over daily SIPs if you get a fixed salary each month. You could opt for SIP dates close to your salary date for convenience.

 

You may focus on selecting the right mutual fund over the best fund to achieve your investment objectives depending on your risk tolerance. You could consider SIP as a tool for investing in mutual funds. You must look at picking the right equity fund and investing through daily or monthly SIP (as per convenience) to maximise return over a period. However, you could opt for daily SIP if you earn daily wages.

 

Points to be considered before choosing SIP type:

1- Daily SIPs would get impacted for the funds that have invested in mid-cap and small-cap stocks. Usually, small-cap funds are considered volatile, and day-to-day investing through SIP in small-cap funds would lead to higher volatility than monthly SIPs. Accordingly, if your daily SIPs are getting invested when the market is rising, you may observe higher returns. If the market is declining, then the daily SIPs would give you lower returns compared to monthly SIPs. However, you can expect stable returns when investing in Large-cap funds through daily SIPs.

 

2-The growth prospects of daily SIPs are usually dependent on the efficiency of fund management. Hence, before investing in the daily SIPs, one should consider the particular mutual fund’s credibility and strategy.

 

3-Daily SIPs can limit the losses as the investment is made in granular portions; however, as the risk is minimised, the returns are lower than the return offered by monthly SIPs.

 

4- Daily SIPs are better for individuals who are into business or any profession that earns daily wages. Whereas for people earning a monthly salary, monthly SIP is a better option. The SIP date should be selected closer to the date of salary credit for salaried employees as you have a sufficient balance in your bank account. If the SIP instalment doesn’t go through for three consecutive months, then the AMC cancels the SIP, and the bank can penalise you.

 

5- Daily SIPs will diversify the investment. Although, you should opt for diversifying your entire financial portfolio. The returns will be average if the purchase price is averaged. But, if the fund is not volatile, the returns of monthly SIPs will be high as compared to daily SIPs.

 

6- Monthly SIPs offer better investment planning opportunities, as you can monitor the investment in a better way. However, you could struggle to monitor investments if you put money in mutual funds through the daily SIP.

 

7- Daily SIPs make it very tedious to track investments and returns. Also, you will have multiple entries of purchase of the SIPs in your account, making it difficult to track all assets in one go.

 

Source: Cleartax

Why Should You Invest In SIP – Know The Benefits

Systematic Investment Plans (SIPs) are a mode of investment in mutual funds, an alternative to lump-sum investment. Most investors are often confused if SIPs are a type of mutual fund scheme or whether it is any different type of investment other than mutual funds. Well, it is important to note that SIPs allow investors to invest periodically where you can buy units of a mutual fund scheme every month by investing some amount.

 

What is a SIP?

SIP refers to the Systematic Investment Plan where you can invest a small amount at regular intervals in a mutual fund (MF) scheme. Each time you invest, you buy more units of the scheme and you can set a date for auto payment. You can start and stop the SIP any month, without any charges or fees, unlike the Recurring Deposits, where they charge you for premature closure. You can also skip the SIP installment and then continue from the next month without paying any additional charges.

 

Benefits of SIP

With a SIP, an investor enjoys not only the benefits of a mutual fund scheme through its returns but also gains some additional advantages. SIPs have certain benefits over lump sum investments as explained below:

 

Power of Compounding

One of the most advantageous features of SIP is the power of compounding. Each time you make a payment, you buy more units, which generate returns on your investment. These returns are further reinvested in the scheme and hence, investors benefit from the effect of compounding. If investors start investing early and stay invested for a long time, they will reap optimum returns from the SIP.

 

Rupee Cost Averaging

Investors tend to invest in schemes that seem profitable and have been performing well. Usually, when they outperform the benchmark, more investors invest, thereby increasing the NAV (per unit market value) of the mutual funds. Investing in a lump-sum mode means buying lesser units at high prices. But due to market upheavals, the stocks and the returns also rise and fall. The prices of mutual funds units fluctuate. Through SIP investment, the cost of the total units purchased by the investors as long as they continue the scheme is averaged out. When prices are high, fewer units are bought and vice-versa. This is called rupee cost averaging. This is a benefit unique to SIP and not to lump-sum investments.

 

Light On Pocket

SIP is light on the pocket because you do not invest a huge amount at once but contribute small amounts at periodic intervals. You can also skip the installments when you are running short of money and increase/decrease the monthly SIP amount as per the requirement and financial conditions. Beginners can start with amounts as low as Rs. 500, which makes it convenient even for students and young earners with low-paid/part-time jobs to invest.

 

Flexibility

SIPs are flexible not only because you can start or stop them anytime or skip an installment but also because you can make changes in the SIP amount. It also offers the flexibility to withdraw money partially or fully without any charges or discontinuing the scheme. This way it can serve as an emergency fund where the money is credited into the bank account once you request the withdrawal. Moreover, several types of SIPs like ELSS and ULIPS are tax-saving and insurance-cum-investment plans respectively. Some schemes also allow investing bi-monthly or fortnightly and allow you to opt for ‘Step-up SIP’ which will uniformly increase the installment amount.

 

Saving Discipline

SIPs inculcate a habit of regular saving and investments. In fact, you can set a date for auto-debit from the bank account to invest in a scheme and this way you develop a disciplined habit of investment. Every month, you end up contributing a small part of your income to investments that can reap you good returns. It will help you build an inflation-beating corpus in the long run.

 

Wrapping it up:

Systematic Investment Plans or SIPs are a mode of investment in mutual funds where the investors do not buy units at one time paying a lump-sum amount. Rather, they invest through installments paying small amounts periodically. This helps them to stay invested in mutual funds by dedicating a small part of their income which is light on their wallet. Also, it averages out the total costs of the scheme’s units purchased and has a compounding effect on returns. The flexibility and the low minimum amount of SIPs make it convenient for small investors.

 

Source: Paytm

Common myths about SIP investments

  • A systematic investment plan or an SIP is a disciplined way of investing, in which an investor can make equal payments at regular intervals over a period to accumulate wealth over the long run. An SIP is considered among the most effective ways of investing for retail investors. It does inculcate the discipline of saving and building wealth in the long run. In India, mutual funds continue to be one of the most significant investment choices amongst investors.
  • As we become aware of the advantages of SIPs, there are a number of myths that have been around the same. Some wonder if SIPs are safe, if they are tax-free and if SIP pays an interest. To become more financially aware, it is crucial for investors to clear their doubt about the myths surrounding SIPs and decide their investment journey.
  • Here are seven common myths about investing via SIPs in mutual funds.

Myth 1: SIP is Only For Small Investors
 
Even though SIPs provide an option to invest in smaller amounts, it should never be assumed that only large amounts are needed to invest via SIPs. With the SIP method of investments, investors can invest as much as they prefer. It is true that many high net worth individuals (HNIs) and wealthy investors invest in the markets via the SIP route. All it requires is one to get the KYC done and they can invest through SIPs.
SIPs enable an investor to invest in the market on a regular basis. Every individual is eligible for this method in order to save for their long-term financial goals. Therefore, it is wrong to consider that SIPs are only valid for small investors.

Myth 2: SIP Can Be Done Only For Equity Funds
 
A common myth amongst investors is that they can invest only in equity funds via the SIP mode of investing. This is not true at all. While investing in mutual funds via SIP, investors can choose from a plethora of available options ranging from debt funds, hybrid funds, funds of funds, index funds, thematic funds, among others.

Myth 3: SIP is a Product
SIP investment is a facility that allows investors to invest periodically at regular intervals. Investors can choose from a portfolio of available mutual fund schemes and the investment amount gets deducted and invested in the scheme. The individual can choose from varying schemes as per their financial objectives and risk appetite.
In the case of SIPs, say an investor wants to invest INR 24,000 spread across a period of 12 months, investors get the flexibility to purchase mutual fund units by investing INR 2,000 every month. SIP is not a product but a type of investment option.
 
Myth 4: SIP Can’t Be Modified Once Selected
 
Many investors are wary of the fact that once an SIP is initiated, it cannot be altered – this is not true. SIPs are considered among the best ways of investing in the capital markets that provide flexibility in the mode of investing.
It is important to understand that once an investor finalizes their SIPs, the amount, period and even the mutual fund scheme can be altered. Investors have the freedom to change the investment amount and the tenure as per their requirements. Investors can change the amount of the SIP if their income increases or decreases and if they plan to save or invest more.

Myth 5: SIP in Low NAV Funds Will Offer Higher Returns

Many investors believe that mutual funds with lower net asset value (NAV) are cheaper and hence would yield higher returns. Even though the NAV plays an important role while investing, it does not signify the return that the mutual fund scheme can offer.
The NAV of a fund is the value at which an investor purchases or sells mutual funds units. The NAV of a fund changes regularly. The cost of mutual funds (NAV) does not determine the returns.
For example: If someone wants to invest INR 10,000 and has two options: One fund has NAV of INR 100 and the other fund has NAV of INR 1,000. With a lower NAV fund, a person can buy 100 units and with higher one, a person can buy 10 units, but in either case, the sum invested is INR 10,000, the value of investment being identical. Hence, investors should focus more on the actual performance of the fund rather than just the NAV.

Myth 6: SIP is Subject to Guaranteed Returns

SIPs grants the investors the ability to invest in the mutual funds periodically. Investing through SIPs in the mutual funds is safer compared to the equity markets yet mutual funds are subject to market risks depending on market volatility.
In the short run, it is difficult to attain guaranteed returns for an investor while being invested in mutual funds for the long term helps yield capital appreciation. Thus, investors should be clear that investing in the market carries some degree of risk and thus one needs to be prepared before investing. Investing in mutual funds through SIPs gives the investor the benefit of rupee cost averaging (RCA).

Myth 7: Don’t Invest Through SIP in a Bullish Market

Investors need to see-through the level of discipline, patience and research required while investing in mutual funds. Most SIPs yield results over the longer term. It is not practically possible to time the markets in real-time. Buying at dips and selling at highs is theoretically possible but is not feasible when it comes to practical decisions.
In the longer time frame, SIP investments usually deliver higher yields. It is crucial to understand that bullish and bearish phases require consideration in case you are investing through the lump sum method.
As investors invest through SIPs, the rupee cost averaging eradicates the impact on portfolio with the passage of time. SIPs negate the impact of market volatility on your portfolio. Thus, investing in mutual funds through SIPs doesn’t require investors to wait for the right time. It is important for people to understand the importance of early investing and reap the benefits of compounding.

Bottom Line

If you are looking to start your investment journey via SIP, make sure you look for a long-term perspective. Considering SIP investing is all about discipline, a sound approach coupled with patience can lead to wealth creation over a period of time.
Additionally, investors should also keep in mind the historical data of mutual fund performance. There is no right time to start your investment in mutual funds. The sooner you start your investment journey, the better returns you can expect to yield in the future.
  

Source: Forbes

Don’t Wait To Start Saving, Take Action Today | Deeva Ventures Pvt Ltd

Don’t Wait To Start Saving, Take Action Today

In life, we need to take action.  Today, I need everyone to start saving immediately if you haven’t yet. 


How many of us have always thought about saving but think that we can always do it tomorrow? We always think that we can wait, but you will be waiting forever to be financially free too.


  • 1. We can’t wait to go on a vacation but we can always wait to pay our mortgages.

  • 2. We can’t wait to get rich quickly but we can always wait to learn how to get rich through time.

  • 3. If you give yourself excuses, stop.

  • 4. We can’t wait for early retirement but we will have to wait.


  • 5. If it, is you, change?

  • 6.If you want to feel financially secure, save.

  • 7.We can’t wait to leave work but we can always wait to learn how to increase our wealth.

Trim down your spending and start saving.  Otherwise, I guarantee you will regret it.


Systematic Investment Plan (SIP) | Deeva Ventures Pvt Ltd

Systematic Investment Plan (SIP)

Everyone wants their money to grow to accomplish their financial goals but the risk of losing the hard-earned money has confined people in a “let it be” zone. Money won’t grow sitting idle in your account.


Don’t worry, there is a way to invest your money with low risk and high returns. Confused? It is none other than a Systematic Investment Plan (SIP) in mutual funds.


As a beginner, you need to invest your money in a scheme with low risk and high returns. And SIP in Mutual Funds is the one that can provide you with such comfort.


What is a Systematic Investment Plan (SIP)?

It is a method of investing in mutual funds. A particular amount of money (minimum Rs. 500) is invested every month to mutual funds for the period you want to invest. It involves very low risk and due to this reason, in little time, it has become the top preference of newbie investors.


Reasons to invest through SIP:

Diversified Investments- Investing through SIP in mutual funds offers you an advantage to invest in different assets. It reduces the risk and gives you higher returns. As a newbie, you don’t want to lose money in the first go.


Therefore, Investing in SIP does not only give you risk-free returns but also provides a diversified portfolio.


Compounding Effect:

 SIP in mutual funds is much more profitable due to the compounding effect. Compounding effect means the returns on reinvestment. The returns you get from your investment, those returns are reinvested and this way, you get returns more than you estimated.


Rupee Cost Averaging:

 This factor plays a big role in fetching maximum returns. Due to fixed regular investment, it averages the amount of one unit.


When the market goes up, you buy less; when the market goes down, you buy more. It is also one of the things intelligent investors do and Guess what? You don’t even have to engage with daily market updates. It all happens itself.


Conclusion:

Risk follows investment; they said. Lower risk can give you higher returns; they never said.


Investing in SIP is easy. You don’t need to take daily market updates to invest. Start your SIP once and enjoy stress-free high returns.


Why You Should Increase Your SIP Every Year | Deeva Ventures Pvt Ltd

Why You Should Increase Your SIP Every Year

Many investors think of SIPs and mutual fund schemes as synonyms, however, that is not the case.
 

SIPs are merely tools that allow you to invest in a mutual fund scheme over some time.

It can be monthly, quarterly, or semi-annually depending on your financial goals. 

 

It acts as a convenient option for salaried individuals to regularly invest in mutual funds.

 

The money can get deducted from their account automatically thereby engraining a financial discipline.

 

How to Start SIP Investment?

You can start a SIP with a minimum amount of Rs. 500. Here is how to start a SIP 

investment if you wish to buy mutual funds.

 

• Basic Information
The first step of SIP investment requires you to provide all your basic personal information in an online form such as your name, date of birth, address, mobile number, etc.

 

• Aadhar Based eKYC
The above procedure for SIP investment can be simplified if you have an Aadhar card. You have to enter your Aadhar number and authenticate it with a One-Time Password (OTP). 

 

This will pre-populate the online form with all your basic information details available in the UIDAI database.

 

IPV through a video call is not required if you complete the eKYC procedure through Aadhar as the UIDAI database already has your biometric information. 

 

However, there is a statutory limit that will not allow you to invest more than Rs. 50,000 per fund house in a financial year if PAN card details are not submitted by you. 


You can submit your PAN card and enhance this limit.

 

• Upload Documents
In the next step, you are required to upload a scanned copy of your PAN card and address proof.

 

Benefits of Increasing Your SIP Investment Every Year

Here are some advantages of increasing your SIP every year.

 

• Counters Inflation
While investing, the return adjusted for inflation is a significant factor to be considered.

 

As inflation increases every year, the amount you find substantial today may not have the same worth some years down the line.

 

Hence, if you do not increase your SIP investment amount every year, you ignore inflation which erodes the purchasing power of your hard-earned money.

 

• Builds A Bigger Corpus
When your income and surplus increase every year, it makes sense to increase your SIP investment too.

 

 It adds to the power of compounding and helps accumulate greater wealth by building a bigger corpus. Even a small 5% to 20% increase in the SIP investment plan at the end of 10, 15, or 20 years can make a big difference. 

 

Also, you can avoid increased documentation as it will reduce the necessity of creating and tracking multiple stocks.


7 Advantages of SIP | Deeva Ventures Pvt Ltd

7 Advantages of SIP

Systematic Investment Plan (SIP)

A systematic Investment Plan or SIP is a method of investing money in mutual funds. The other way to invest in a lump sum or one-time payment.

 

In SIP, you invest a fixed amount of money in a mutual fund of your choice every month. 

The setup is such that the money is automatically debited from your bank account. 

 

To know what amount of monthly SIP you need to invest to achieve a certain money goal, use our SIP calculator.  

 

1. You Can Stop the SIP Anytime

There is no fine if you decide to stop a SIP plan. If you want to stop it, you simply have to opt-out of the SIP plan.

 

This has a very big advantage over recurring deposits (RD) which usually put a fine on you if you want to stop it.

 

After stopping your regular SIP investment, you can choose to get back the amount or let it continue to be invested in the mutual fund.

 

2. You Can Skip SIP Payment 

If for some reason you don’t have enough balance in your account for the SIP investment of a certain month, you can continue with the SIP next month without any problems.

 

No fine or charges will be levied against you. In the case of RD, there will most likely be a fine for missing a payment.

 

3. You Can Invest Very Small Amounts

With SIP plans, you can start investing in mutual funds with an amount as little as ₹500 a month. Here are the best mutual funds to start a SIP investment with ₹500.

 

Even if your savings are not very large, you can still take advantage of the growth being experienced by India by investing in mutual funds!

 

4. You Benefit from the Effect of Compounding

When you invest using a SIP plan, your monthly SIP investment gives returns. Those returns are added to your actual investment amount and invested again!

 

So over time, your continuous monthly SIP and the returns earned by them are subjected to a compounding effect that ensures exponential growth.

 

5. You Can Start a New SIP If You Have More Money

If you start earning more or if you can save more, you can always start a new SIP plan in the same mutual fund or a different mutual fund.

 

That way, the extra money will also be invested for the future!

 

6. You Do Not Need to Worry About Timing the Market 

You must have heard that you shouldn’t invest in an inflated market. When you invest using a SIP plan, you do not need to worry about timing your investment at all.

 

At times when the markets are high, your monthly SIP buys you a fewer number of units of a mutual fund. When the markets are low, the same monthly SIP amount buys you more units.

 

Therefore, in the long term, you do not pay very high prices for any unit of a mutual fund. This is called the rupee cost averaging.

 

7. You Become More Disciplined in Your Savings

It is a common complaint of many people that they aren’t able to save money. The truth is, the more you earn, the more you spend. 

 

This is why you should save first and then spend. If you fix your date of SIP investment right after the date you receive your income, you invest before spending!