People mistake SIP for a mutual fund or a specific investment avenue. However, the fact is that SIP is a way/method of investing and not a fund/scheme or stock. SIP simply helps you invest a certain amount periodically in a fund/scheme of your choice.

SIP is ideal for new investors. First, you need not have a huge amount of money to start an SIP. You can start with as little as Rs.500 per month. Second, it does not require you to time the market. Third, it is managed by experienced fund managers who deploy your funds in the market. Fourth, they are convenient and instil a sense of discipline in investing. Finally, SIPs are simple to start with and even flexible in terms of the amount, frequency, date of debit, etc.

It is often tempting to invest all our money at one-go, especially when the markets are doing well. This is because we tend to think that the rally will continue. However, it is always advisable to invest via the SIP route, particularly when investing in equity. This is because SIP offers the benefit of rupee cost averaging. This ensures that you get more units when the market falls and less units when it rises, thereby averaging the cost per unit. SIP also eliminates the risk of timing the market and irons out the troughs and peaks so your portfolio can sustain extreme conditions.

There is no fixed amount to be invested in the SIP. An SIP investment can be as little as Rs.500 a month.

There is a notion that the choice of SIP date plays an important role in the returns. The reality is that SIP date has very little significance over a long period of time. It is just a date for your convenience–the date on which you would like your bank account to get debited.

This depends on your preferences and financial goals. If your investment is goal-oriented (such as buying a house), the SIP will have a time period that matches the goal. However, if you are young and have a regular income, you can continue for a long period and even until or after retirement.

It’s easy to start an SIP online following a few simple steps. Visit the website of the fund house of your choice. Register a new account and select the fund you want to start an SIP in. Then, all you need to do is fulfil your KYC requirements online and create a debit mandate with your bank. You can also take the offline route by visiting any branch of the fund house.

Yes, you can! SIPs are super flexible. You are free to change the date of debit and frequency, modify the SIP amount, and also pause or stop your SIP. You can also change the SIP scheme within the same fund house.

This depends on your risk profile, investment horizon, and expected returns. If you are risk averse, debt funds may be ideal for you. If you can take on more risk and have a long-term investment horizon, equity funds may be appropriate. Ideally, you must invest in funds in such a way that it diversifies your portfolio, i.e., avoid putting your eggs in the same basket.

It is understandable to be worried seeing negative returns on your investment. However, note that markets regularly see ups and downs. Every time the market falls, your SIP is buying your more units. Also, the loss that you see is only notional, i.e., it will be real only if you decide to sell off your holdings. Hence, it is prudent for investors to continue with their investment plans. An SIP is built for the long term or for meeting specific financial goals. Sticking with your SIP through downfalls also enhance your chances of gain when the markets recover.

SIP is a great option for goal-based investing, whether it is buying a home or going for a vacation. Simply figure out how much money you will need, when you will need it, and back calculate the amount you need to invest using the assumed rate of return*. Our SIP calculator will help you arrive at the magic number in seconds!