Reasons to Choose SIP's for Wealth Creation

Published : 15 June 2023

What is SIP?

A systematic investment plan, or SIP, invests fixed amounts on a regular basis in your preferred mutual fund strategy. 

Reason 1: Simplicity of choice

With SIP, you can begin investing little sums every month—as little as Rs 500—and watch them grow. A SIP not only makes tracking easy and convenient, but it also increases your savings.

Reason 2: Rupee cost averaging

Rupee Cost Averaging, which allows you to buy more units when the market is low and fewer units when the market is high, is what makes SIP special.

Reason 3: Flexibility

You have a tonne of flexibility with SIP. You can either take a full or partial loss on your investment, depending on your preference. Additionally flexible is the investment amount; it can be raised or lowered.

Reason 4: Compounding effect

The concept behind SIP is earning compound interest on your investments. To put it another way, a small sum invested over a long period of time yields better returns than a single investment.

Reason 5: Can act as an Emergency Fund

You can withdraw your SIP Investment as an emergency fund because it is an open-ended fund with no tenor.