Most people consider Finance and Investments as topics of significant risk and bulk money. However, there are investment plans in the country that can help you save loads of money with minimal monthly investments; it is known as Systemic Investment Plan or SIP.
SIP refers to an investment plan on athat involves investing fixed money every month for a certain period. The SIP investor will benefit from the return interest the mutual fund institutions will pay them.
People can enjoy maximum profit by signing up for SIP investments for a longer duration as the compounding effect of your money can help you gain good profit.
1. Compounding Effect
Now you must be wondering, what is compounding? Compounding refers to earning interest on the interest money earned through your investments.
For Example, if you invest Rs.1000/- for ten years with a 12% annual return, then you can receive a return on the interest you receive every year that gets added to your maturity amount, so afterten0 years, you will receive Rs. 2,32,339/-.
Compounding is a game-changing track for people as they can earn massive amounts just by signing up for SIP with minimal charges.
2. Financial Discipline
Investing in SIP requires a person to segregate the desired monthly amount as savings to fulfill the SIP needs. It eventually instills the power of financial discipline in people.
It is straightforward to imagine that you will save Rs. 20,000/- per month from your salary, but when you see that bank balance, you will be eager to spend the money on your wants and desires instead of saving.
Binding yourself into a SIP plan is an excellent idea to begin with financial discipline, as it can make you reach great heights in your financial journey.
3. Easy on the Pocket
SIP is very easy on the pocket because you will choose the minimum amount available to be invested. Hence, it cannot cause any financial burden to meet the SIP needs.
You can even start investing with as minimal as Rs. 100/- or Rs. 500/- in SIP. It is a valuable investment tool for students also as they can invest Rs. 100/- from their pocket money to begin their journey toward financial discipline.
4. Skipping is an option
Life is full of surprises, and when it comes to money, it can surprise or shock you in every possible way. There can be some months when it must be financially burdening or tight for you to pay for your SIP; in such cases, you can skip a month or two until you are financially ready to invest.
SIP is a very flexible investment option, and you can easily skip during medical or family emergencies where you need money and cannot make investments.
5. Stop Anytime
You can also stop anytime you want and withdraw the amount you invested until then. There are no rules in SIP regarding withdrawals or stoppage of services. There are no extra charges levied for stopping abruptly.
Signing up for a SIP plan is like living in a city without parents; there is nothing and no one to hold you back, but you must stand your ground to grow financially.
6. Flexible Withdrawal Options
SIP provides customers with flexible withdrawal options. People can withdraw their desired amount from their invested SIP amount anytime without limitations or restrictions.
If you have an emergency and are looking for options to seek money, then you can rely on your SIP money as you can use it unlimited times without hassle.
7. Lesser Investment Cost
Whenever we hear the word investment, it seems like a big word involving massive amounts, not less than lakhs. Yes, such investments are available in the finance market, but you can enroll for basic and minimal investment options like SIP as you do not have to burn out a lot of your money.
You can start your SIP journey by beginning your investments with as minimal as Rs. 100/-. The lower investment cost will never become a burden to your monthly finances and can help you fulfill your dreams and financial goals.
8. Long-term benefits
Investments should always be made long-term. If you keep your money for a long time, then only you will earn good interest on the money.
SIP is a monthly investment plan which can reap long-term benefits. You may have long-term goals like children’s education, buying your own house, and many others for which the most important thing you will need is capital.
SIPs can be a great source of capital in such needy situations of life. You will be grateful to have invested in plans like SIP.
9. Accessible for Low Income Range Population
SIP is the most accessible investment plan to benefit economically lower strata people or freshers who have just begun their jobs or low-income range population.
The population with a low income below Rs. 10,000/- can also sign up for SIP investments to enjoy long-term benefits.
Since the investment value is insufficient for SIP, it is not a burden for lower-income families or people to set aside a monthly investment to enjoy bulk money in the future for primary financial needs.
10. Financial Penetration
Investment tools like SIP can help engage more population in the country’s financial system. Even remote places in India can be involved with investment tools like SIP to build a more robust economic foundation for the government and increase financial penetration in the country.
The ease of accessibility and lower-value investments are the most valuable points that can help people engage with the SIP tool and help them achieve their long-term financial goals.
With so many excellent benefits of SIP, you must hurry to invest in the best mutual fund to gain the maximum advantage in your future. SIP is the most non-risky and beneficial investment option for all kinds of people.