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Systematic Investment Plans (SIPs) have become one of the most sought-after methods of <keyword id="35175" type="UNKNOWN" weightage="20" keywordseo="investing">investing</keyword> in mutual funds. An SIP allows an investor to invest a certain sum of money periodically in a mutual fund for a specific period. It operates similar to a recurring deposit. However, unlike RDs which are debt instruments, SIPs are linked to mutual funds, and therefore, the market performance. If you are thinking how much should be invested through SIPs, experts suggest to stay invested for a longer period. “Also, it is essential that you do not miss your investment commitments. You must not attempt to invest more than what you know you can spare after your liabilities and essential expenses are covered,” said Ajit Narasimhan, Category Head – Savings &amp; Investment, BankBazaar. Narasimhan said investing in mutual funds through an SIP offers investors better risk-adjusted returns. Here are 4 reasons why SIPs are a good deal

4 reasons why investing in SIP is a good decision

The suitability of an investment option depends on the reasons why you invest and what you expect from the investment. There is no single investment plan that is always superior over the others. Hence you must choose the right investment options through a careful study of the options in front of you. Here we compare between FD (<keyword id="74427" type="PERSON" weightage="20" keywordseo="fixed-deposit">Fixed Deposit</keyword>) and SIP (<keyword id="6359303" type="DEFINITION" weightage="20" keywordseo="systematic-investment-plan">Systematic Investment Plan</keyword>) to suggest which is better as a long term investment vehicle. (FD) Fixed Deposit Both banks and non-banking financial firms offer fixed deposit plans. Under this option, the investor puts in a fixed amount of money over a fixed period of time. FD is considered one of the safest investment option you will find in the market. It assures high returns on the invested amount. There are different kinds of fixed deposits to choose from. The rates of interest and the terms and conditions governing them vary from one plan to another. Fixed deposits can meet short term or long term goals and the best thing about them is the fixed return they assure the investor. The amount to be invested and the duration of the investment can be conveniently chosen by the investor. It is also possible to get a loan on your fixed deposit. Premature closing of the FD is also possible. Fixed deposits over 5 years provide various tax benefits to the investor. (SIP) Systematic Investment Plan A systematic investment plan lets the investor invest a fixed sum of money on a regular basis in a <keyword id="6354820" type="DEFINITION" weightage="20" keywordseo="mutual-fund">mutual fund</keyword>s scheme. Generally in an SIP scheme, the money is invested in an equity mutual fund scheme. If the investor is new to the concept of mutual funds, SIP is one of the best suited investment option. SIP creates the habit of making timely investments. SIP also lets you accumulate a lot of money over certain time period. SIP assures better returns than FD. Systematic investment plan offers several advantages. The investment can be customized as per the needs of the investor. The investor can also track the performance of the investment. SIP investment also carries various tax benefits. It is also possible to withdraw easily and invest money at any time the investor wants. Taxes you will incur on long term capital gains Long term capital gains refer to an investment that is made for a period more than year. The gains resulting from the amount invested in an equity based scheme for more than a year is called as long term capital gains. Long term capital gains is applicable only on mutual funds that feature more than 65% equity investments. Hence an investor will have to pay 10% tax on long term capital gains if the gains exceed more than one lakh per year. Conclusion <keyword id="7198664" type="UNKNOWN" weightage="20" keywordseo="FD-vs-SIP">FD vs SIP</keyword> If you are a conservative investor wanting to avoid risks, FD is the right investment option. Fixed deposit also features a high degree of liquidity and guaranteed returns. SIP on the other hand does not guarantee the returns and the benefits can vary depending on the market performance. However, while talking of long term returns, an SIP is a better option if you are prepared to take the risk.

FD vs SIP : which is better for investment in long term

Investment decisions must follow a careful analysis and informed knowledge so that we get the best results in line with our expectations. Here we compare between the two investment vehicles namely Systematic Investment Plan vs Public Provident Fund to understand which is better for investment. What do they mean to an investor? A Systematic Investment Plan or a SIP is a kind of <keyword id="6354820" type="DEFINITION" weightage="20" keywordseo="mutual-fund">mutual fund</keyword> investment. Under an SIP investment option, the investor subscribes to a given mutual fund through a pre-defined amount payable on a monthly or any other regular interval basis. Since the investors are buying units of the said mutual fund by paying a standard amount over a well-defined tenure, the investments will not be affected by the market volatility. A PPF investment is a conventional savings scheme introduced by the government of India under the 1968 Public Provident Fund Act. The objective of this investment is to enable people make savings with encouraging returns over a long period of time. Year on year, the government decides the rate of interest over this investment. PPF is a kind of long term investment with a 15 years tenure. The minimum and maximum amounts that can be invested in a PPF scheme is Rs 500 and Rs 1,50,000 respectively. How these two schemes compare Returns Since an SIP investment is done in mutual funds, the returns will depend on the given mutual fund’s performance. The returns on SIP will be as per the current market trends. The returns on PPF are calculated on an annual basis and are decided by the government. Purpose SIP investments are suitable for most people as they can satisfy short term, medium and also long term goals. They are deemed ideal for wealth creation. However, a PPF investment will suit only long term investments. It can be the best scheme for retirement benefit, education or marriage of children and not for other kinds of investment needs. Tax benefits Investments in SIP will invite both short term and long term capital gains tax. Nevertheless, investment in an equity linked savings scheme will enable you to claim deductions of up to Rs 1,50,000 under Section 80C of the Income Tax Act 1961. A PPF investment falls under Exempt, Exempt, Exempt (EEE) category that means the returns and also investments are tax free. Investment Tenure The investment tenure is flexible in case of SIP between 6 months and 1 to 20 years or more. The PPF scheme allows a minimum investment tenure of 15 years. After the maturity period, the investment can be extended for 5 more years. Liquidity SIP investment carries the highest degree of liquidity when it comes to withdrawals. You can get the entire mutual fund amount credited to your bank account linked with the plan within just 3 working days. From a PPF scheme, you can withdraw a partial amount only from the 6th year of investment. How to choose between them The choice of whether an SIP or PPF investment scheme will suit you depends on your investment goals. Decide if you are looking for a risk free long term investment in a PPF plan or you would expect higher returns that carry some risks and more liquidity in a SIP plan.

PPF Vs SIP: Which is better for investment?

‘SIP’ expanded as <keyword id="6359303" type="DEFINITION" weightage="20" keywordseo="systematic-investment-plan">Systematic Investment Plan</keyword> is not synonymous with the term ‘equity’. SIP can be viewed as a tool that lets an individual invest in <keyword id="6354820" type="DEFINITION" weightage="20" keywordseo="mutual-fund">mutual fund</keyword> schemes on a regular basis. An SIP lets you stagger your investments in equity schemes over a period of time. This can be done on the quantum of money also. It is a convenient tool for salaried people to invest in equities regularly. It is also considered as a better way to invest in equity funds since it helps avoid caching the market at a particular level. Equity is also called as the shareholder’s equity that stands for the amount the investor (shareholder) will get if all the company’s funds are liquidated and the company’s debts are paid off. It is the value of the share (ownership) the investor holds in the enterprise. Equity is also one of the most common metrics employed by analysts to assess the financial health of a company. To understand the term equity in simple terms, we can say it is the value of a person’s ownership in a given asset after subtracting all the debts connected with it. Why is equity important? The concept of equity is important because it refers to the value of the stakes an investor holds in a company. Any investor holding a stock in a company will be naturally interested in their personal equity in the enterprise which is represented by the total value of their shares. Personal equity is in fact a function of the company’s total equity. When an individual owns a stock in a company, it might yield a capital gain over a period of time. Stock price appreciation and dividends given out to the shareholders are the products of equity. Owning equity in a company gives the shareholders the right to elect the board of directors or vote in any elections connected with the enterprise. To make things simple and clear, equity is the shareholder’s stake in the company. Shareholder’s equity can either be negative or positive depending on the company’s financial health and performance. Why SIP is important? SIP imparts financial discipline to an individual’s life. It also helps the individual invest regularly without having to worry about the moods of the market, index levels and other considerations. When you wish to make a fixed amount of investment in a mutual fund scheme for example, you cannot help worrying about the market conditions. Depending on the scenario, you might need to postpone your investment decision if the investing environment is not conducive to appreciation or if it is not that healthy. A Sip on the other hand places an end to all such predicaments. The amount of money you specify in a SIP is automatically invested on a regular basis in the given scheme without any effort spared from your side. SIP helps average the buying cost. It also maximizes the returns. Many enterprises and schemes allow the investors to customize the way they wish to invest depending on their convenience.

Explained: Difference between SIP and Equity

There is nothing called a <keyword id="15380108" type="General" weightage="20" keywordseo="beneficial-date-for-investors" source="Orion">beneficial date for investors</keyword> in the case of <keyword id="6359303" type="General" weightage="20" keywordseo="systematic-investment-plan" source="Orion">systematic investment plan</keyword> (<keyword id="35471" type="General" weightage="20" keywordseo="SIP" source="Orion">SIP</keyword>) of <keyword id="6357979" type="General" weightage="20" keywordseo="mutual-funds" source="Orion">mutual funds</keyword>, said <keyword id="13446789" type="General" weightage="20" keywordseo="WhiteOak-Capital-AMC" source="Orion">WhiteOak Capital AMC</keyword> on Saturday. According to a study made by the company, the date of investment does not make any difference as regards returns. "The study of the last 26 years' index data reveals no meaningful difference between the average return of different dates' 10 years SIPs," WhiteOak AMC said. In the long term it hardly matters if the investor invests via Daily, Weekly, or Monthly SIP Frequency, as per the company. All three frequencies end up generating somewhat similar returns. What is important is to focus on investing a small amount regularly for the long term. According to the fund house, the mid-cap segment is a good investment option for investors seeking to invest via the long-term SIP route. It added that small and midcap (SMID) segments may offer many opportunities for potential higher growth. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/consumer-complaints-need-to-be-resolved-quickly-says-rbi-governor/articleshow/95158160.cms">Consumer complaints need to be resolved quickly, says RBI Governor</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/no-country-better-than-india-in-using-tech-to-protect-clients-securities-sebi-chief/articleshow/95144947.cms">No country better than India in using tech to protect clients' securities: SEBI chief</a>

Date of SIP investment doesn't matter, says Whiteoak AMC

The Systematic Investment Plans (<keyword id="159805" type="COMPANY" weightage="20" keywordseo="SIPs">SIPs</keyword>) have become popular among people, especially after demonetisation. SIP can be dubbed as one of the most sought-after options of investing in mutual funds as it allows an investor to invest a certain amount periodically in a mutual fund for a specific period. Investing in mutual funds through an SIP offers investors better risk-adjusted returns and it has various benefits such as it brings discipline into your investing habits, allows you to decide how much you wish to invest, provides price averaging, takes away the need to time markets, etc. “SIPs help you by averaging costs and reducing risks. So the longer you stay invested, the higher would be your returns. So remember that your SIP is for a long period, and do not stop your SIP mid-way unless it is due to a break in income,” said Ajit Narasimhan, Category Head – Savings &amp; Investment, BankBazaar. Although there is no right age to invest in SIPs, but, like any other investment, the sooner you invest, the higher would be your returns. Moreover, the smaller investment size and the periodicity means that you can begin investing much earlier. Here’s how you can build a huge corpus just by investing just Rs 2,000 per month <table> <tbody><tr> <td> Duration </td> <td> SIP Amount (Rs) </td> <td> Future Value (Rs) </td> </tr> <tr> <td> 4 years </td> <td> 2,000 </td> <td> 1.2 Lakh </td> </tr> <tr> <td> 5 years </td> <td> 2,000 </td> <td> 1.6 Lakh </td> </tr> <tr> <td> 8 years </td> <td> 2,000 </td> <td> 2.9 Lakh </td> </tr> <tr> <td> 10 years </td> <td> 2,000 </td> <td> 4.1 Lakh </td> </tr> <tr> <td> 12 years </td> <td> 2,000 </td> <td> 5.6 Lakh </td> </tr> <tr> <td> 15 years </td> <td> 2,000 </td> <td> 8.4 Lakh </td> </tr> <tr> <td> 18 years </td> <td> 2,000 </td> <td> 12.1 Lakh </td> </tr> <tr> <td> 20 years </td> <td> 2,000 </td> <td> 15.3 Lakh </td> </tr> <tr> <td> 22 years </td> <td> 2,000 </td> <td> 19.2 Lakh </td> </tr> <tr> <td> 25 years </td> <td> 2,000 </td> <td> 26.8 Lakh </td> </tr> <tr> <td> 28 years </td> <td> 2,000 </td> <td> 36.9 Lakh </td> </tr> <tr> <td> 30 years </td> <td> 2,000 </td> <td> 45.6 Lakh </td> </tr> <tr> <td> 35 years </td> <td> 2,000 </td> <td> 76.6 Lakh </td> </tr> </tbody></table> The returns here are calculated at 10%. Equity markets have given an average of over 15% per annum for the last 10 years. So, you will be making a lot more.

You Searched For "SIP" and got 6 results

4 reasons why investing in SIP is a good decision

Akanksha Jain

FD vs SIP : which is better for investment in long term

BI India Bureau

PPF Vs SIP: Which is better for investment?

BI India Bureau

Explained: Difference between SIP and Equity

BI India Bureau

Date of SIP investment doesn't matter, says Whiteoak AMC

IANS

Here’s how you can earn lakhs by just investing Rs 2,000 per month

Akanksha Jain

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