Investment schemes such as mutual funds are one-time deposit scheme. Thus, it becomes difficult for people interested in mutual fund investment to actually do it in one go. That’s where SIP - Systematic Investment Plan, comes in. SIP lets people invest in small amount and meet their financial goals. Apart from that, SIP helps foster an investment discipline among the investors. Here’s how to invest in SIP.
Moving on to the primary question - why should you invest in SIP? Read on to find out.
- Flexibility: SIP schemes come with investment-budget flexibility allowing the investor to adjust - increase or decrease their monthly contribution. So, if after a given point of time you feel like investing more, you can adjust your monthly contribution.
- Regulated by the Government: Investment in the said scheme is regulated by Government bodies like AMFI and SEBI. The rules and regulations introduced by them have made SIPs a secure investment market.
- Tax Benefits: Apart from yielding high value as return, investment in SIP plans are eligible for tax deduction. You can claim tax rebate for the amount you invest while filing your ITR. This deduction would be available under section 80C of the Indian Income Tax laws.
- Higher average returns: Again, the average rate of return offered by SIP schemes are comparatively higher than any other equivalent schemes available in the market.
- Liquidity: Lastly, you can liquidate SIP investment whenever you want to without worrying about any penalty charges.
Check different SIP plans available in the market before signing the dotted lines.
Additional Read: Why you Should Invest in a Systematic Investment Plan or SIP?
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