What is SIP and how does it work?
If you are an investor then you must have heard about SIP.
If you are new and want to invest in mutual funds then it is very important to know about SIP.
In this, you will know what is SIP? What is the full form of SIP? Types of Investment in Mutual Funds, Benefits of SIP, How to Invest in SIP?
So now we know more about all these.
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What is SIP?
What is SIP meaning?
SIP is a "Systematic Investment Plan" to invest in Mutual Funds.
A systematic Investment Plan gives an opportunity to invest a certain amount every month in your preferred mutual fund scheme.
The risk of investing through SIP is low.
Most people invest in Mutual Funds through SIP only.
Whether there is a rise or fall in the stock market, SIP continues to invest in mutual funds regularly.
The time interval to be done systematically can be weekly, monthly or yearly which is decided by the investor.
In Mutual Funds, you can start with an amount of Rs 500 per month.
What is the full form of SIP?
SIP Full Form
The full form of SIP is a "Systematic Investment Plan".
Some people also call it "SIP".
Types of Investments in Mutual Funds
SIP: - In this, investment is made systematically every month.
Lumpsum: - There are no systematic methods in this. The total amount is invested in investment at a time.
What is NAV?
what is NAV meaning?
Investment is done in Mutual Funds according to 1 unit.
NAV is the price of 1 unit of Mutual Funds.
The NAV of Mutual Funds changes every day.
For this reason, every month the investor buys mutual funds at different NAVs.
When the market is bullish then the NAV will be higher and fewer units will be available.
When there is a downturn in the market then the NAV will be less and more units will be available.
Benefits of SIP
SIP Benefits
There is no need to put the investment amount together through SIP.
Investment can also be started with a small amount. In such a situation, people with low income can also invest.
Investing through SIP reduces the risk of investment.
You will make good gains in the long term.
tax exemption
ease of investing
Facility to withdraw money from SIP
According to your need, you can decide to continue or stop investing in SIP.
You can start investing only at the rate of ₹ 500 per month.
The benefits of SIP are very high and its disadvantages are negligible.
In this, you know what is SIP? What is the full form of SIP? Types of Investment in Mutual Funds, Benefits of SIP, How to Invest in SIP?
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