Today we will tell you what is SIP? What does it mean? How to start SIP in any mutual fund and the amount that you deduct from the bank, how does it go into SIP, how is a mutual fund bought?First of all,
what is SIP?
SIP means Systematic Investment Plan. It means how much money you can invest every month according to your convenience, according to your faith. Mutual fund and SIP are not different in any mutual fund. They are the same thing. It is a simple tool to invest in mutual funds. Now the best way is to do SIP. Suppose today is the 30th, salary has been credited, then start your SIP from the next day i.e.
1st. Because today the bank balance will come. Tomorrow, next day SIP will be deducted. You can spend the remaining money on household expenses, groceries and entertainment. That is why it is called mutual fund. And the best thing about it is that you do not have to open any demat account, you can buy any application, be it Paytm, IND, ET through all these apps.You can start SIP in any mutual fund. The deduction will start automatically from the bank. And there are no charges either. These apps offer zero percent commission. Now I will come to the point.
What are the benefits?
Brother, first of all, the savings come out of your monthly salary in SIP. So where you were going to save ten rupees, if you save twenty, it means double the savings are happening. You will not even know.You can see it,
2nd:how are its comparative returns?
Its comparative returns are quite good. It is true that you are making a risky investment in the equity market. If you compare the data of the last ten years, twenty years, then there is no mutual fund that has given negative returns. So, even the easiest and safest option of a large cap mutual fund gives a return of 12 to 13 percent.
3rd,what is its tax benefit?
If you come in higher tax slab of 30% then you will have to pay 30% tax on 30% interest on FDP and the same in mutual fund for long term means after one year, it is only 12.5%. It is less than half. It was 10%, now it is 12.5%.
4th,Do You Know Compounding?
You get the benefit of compounding in this. Suppose you have invested ₹100 in mutual fund today. Next year it increased to₹ 112. 12% return. Now next year you will earn 12% return on ₹112. Meaning next year you will not earn ₹ 12 again but₹ 125. Because you have earned 12% return on ₹112. Isn’t that Kamal’s point. Now one thing of caution, what if the money is lost? So you can study accordingly and invest in mutual fund.Now it is better than picking individual stocks.
If you give your money to a qualified, educated fund manager, he will manage your money further and no one can run away with it. These days RBI has made such strict guidelines.
Now a bonus step,
You have to keep your SIP between 15th to 30th, the reason for this,Because mostly SIP is done before 10th or 15th of the month all over the world. At that time unnecessary money comes in and so the stock market remains high. In the month generally the stock market remains low. And at that time if you do SIP then you will get more units i.e. more value of mutual fund. If you do this comparison at the beginning of the month then it is great.
