Systematic Investment Plan is an organized investment method that enables one to invest fixed amounts of money at regular intervals – usually weekly, monthly or quarterly. SIP usually deals with mutual funds investments.
Popular equity-linked investment programs – such as the Equity Linked Savings Scheme (ELSS) – can be approached with SIP. Investing in ELSS by means of Systematic Investment Plan can be highly beneficial to the investor, not only in terms of the investment returns but also with regard to the tax exemptions on dividends for investment amounts up to INR 1,50,000/-.
Some benefits of SIP are as follows:
Maximum benefits with minimum investment rates.
Reduced risk due to Rupee Cost Averaging.
Organized means of investing in instalments.
Effective from a long-term perspective.
Encourages investors to start investing early.
I have a lump sum to invest and I'm looking at SWP as an instrument for tax efficiencies and better returns.
I plan to invest majorly in Debt MFs ( ~80%) and the remaining in equity since my risk appetite is low and am a retiree.
I don't want to erode my capital, therefore I want schemes which are only Capital Appreciation withdrawal oriented. I would want the redemptions to happen on a monthly basis.
Can you please suggest good debt oriented SWP schemes which can provide returns upward of 7% annually(based on previous performance)? Also to say, this is not my primary source of income, I'm flexible with the returns but hoping for good ROI.
@Anmol Hi, Fincash is a yet another online investing platform that was started in 2016 or you can call it a fintech startup. Having raised funding, it has grown fast to give tough competition to other market players.
I know, there are so many investment platforms these days, one is likely to get confused which one to select.
Briefing you, Fincash is a Mutual fund investment platform that offers simple solutions to your investing needs (as their site says).
Fincash: Key Products
The following are its main attractions:
New Fund Offers
What I like is, they allow you to practice
Smart Investment: Funds are selected by industry specialists.
DIY approach: You can explore and choose funds yourself.
Although, its SIP plan sounds attractive, but no one can guarantee high returns in mutual funds. The returns are influenced by market fluctuations.
However, the investing platform looks easy to use and suggests you solutions based on your long term goals.
I see a lot of people disapproving your choice to take a loan to invest in mutual funds. So after reading their comments you must know you are treading into dangerous waters. But if you still want to go ahead with it, I am no one to judge. To be honest, my friend does it, too. But he has been doing this for a long time. He knows the ways of the market and has taken margin loans to earn profit, too. Once when I was investing as well, he referred a website that gives instant personal loans. I told him then that I couldn’t afford to take such risks and carried on with investing the money I earned. If you want to apply for loan you can visit their online platform and check out their offering. They give instant loans and provide you with flexible tenure options. But still I would caution you to not overuse this opportunity. All the best.
@sdadwal I think I have covered the most important points about a popular mutual fund investment platform "Kuvera" here. You'll also get an overview of the Kuvera App. I have tried to keep it simple.
Investment in Mutual funds:
Mutual funds are quite simple to comprehend and you are supplied with an immediate advantage of instant diversification and asset allocations without the necessity of large investments to generate portfolios. Mutual Fund offers major benefits with respect to returns on a better scale.
When it comes to investment towards Mutual Fund you can either invest directly or through regular distribution/brokerage platforms. But, today we will not explore brokerage platforms or not just about any other platform for Mutual Fund investment.
Today, I bring to you the various features, benefits and unbiased review about Kuvera app.
Why Investing With Kuvera App Direct Funds Is Better than Regular Mutual Funds Platform?
Kuvera is the world’s first completely free financial planning and direct Mutual Fund investing platform with zero fees and several additional features. For direct mutual fund plans investors, Kuvera is the completely free internet portal. The platform is basically free with no hidden fees, no test period, and absolutely no worries on the size of the portfolio that you have.
Apart from the zero transactional fees, it also provides free financial advice.
Direct Investment Fund platforms charge you for recommendations on investments which may be discretionary whereas regular mutual funds do not charge you something for recommendation.
But Kuvera, in spite of being a direct platform ensures free recommendations and expert advice based on years of experience and data-driven strategy in real time.
Kuvera Direct Mutual Fund App Review
A goal-based investment is the main feature of the Kuvera platform. Whether you want to buy a house, a car or any goal that you have always desired for can be achieved by setting your goals right with the Kuvera platform. It ensures that the investor of fund identifies the related risks.
Kuvera provides direct mutual plans with a one-click switch from the standard mutual fund plans from non-demat accounts directly to your account. The system enables you to readily import current plans. It also enables you to manage many different portfolios of your family members and friends by signing up with a single account.
With Kuvera, when you are looking for investment, it takes a while to complete the KYC. Kuvera has an outstanding, easy-to-use and intuitive app which ensures that selecting the choice of your funds and setting up the SIP is a breeze. The dashboard is easy and very efficient in understanding your profit/loss in absolute terms and percentage. They also show XIRR (Extended Internal Rate of Return) when various investments are made in instalments throughout the financial year.
Funds from the Industry leading Fund houses
If you are looking for the type of direct plan Mutual Funds that are available with Kuvera, it has a good mutual fund lists across the web.
The other features of Kuvera embrace easy withdrawals, fund choice, setting up goal based portfolios, no tax on redemption, and a lot of saving. Investment on direct plans through Kuvera, therefore, yields greater profit than regular plans provided by comparatively other platforms.
Did I miss any crucial point while sharing the Kuvera App review? Do let me know.
The introduction of Systematic Investment Plan (SIP) in the mutual fund is regarded as one the major breakthrough in the financial sector. It has helped to attract a new class of investors in the sector who were not comfortable to invest a lump sum at a time.
SIP in mutual fund first was launched on December 4, 2010, through BSE Star MF platform.
So, What is SIP and why it so much popular among mutual fund investors?
What is SIP? Systematic Investment Plan
Systematic Investment Plan is an investment mechanism offered in open-ended mutual fund schemes. Here, small regular investments are made in a particular MF scheme over a long period of time.
It helps in beating the volatility in the market and accumulate large amount at maturity with the small investments made over the period. The investment mechanism is similar to Recurring Deposit scheme in which one saves with the bank and in SIP, one invests in the market and return percentage is far better than RD.
SIP: Features to know
Investment in SIP can be started with minimum of Rs 500 and then increases in a multiple of Rs. 500.
Flexible intervals with Monthly, Quarterly and Half yearly investments.
Focused method towards investing with ease.
The real benefit in SIP comes through the power of compounding. Small investments made earlier in low price magnifies at the time of redemption.
SIP helps to average out the fluctuations in the market with investments done at different price.
SIP delivers attractive return over a long term investment horizon.
How does SIP work?
SIP works on a simple formula, Start Early with Regular Investments to create wealth.
It is always difficult to time the market correctly to make huge fortunes due to n numbers of factors constantly affecting the market. But with SIP, it reduces the factor of volatility in the investment as it is spread over a long period of time.
The market constantly moves in an up and down direction. Since an SIP invests regularly in the market whatever the market condition is, some investments are locked when prices are low and some at higher prices. Therefore, it helps to average out the volatility and achieve a lower average cost per unit.
SIP calculator is provided on different platforms. These are very comprehensive and easy to use. An investor needs to mainly provide three sets of information i.e
Expected saving in a year
Duration of the investment
Expected Return (Normally it is suggested to take between 12-15 percent p.a.).
The chosen SIP calculator will compute the data given and will show the expected return of the investment in a Graph or Table format with expected maturity value.
How to start an SIP?
To start SIP on a particular scheme, an investor has to submit following documents with specific details and mandate.
Investment form with details of the investor and MF scheme
A SIP registration form, in which details like time period of the SIP investment (5y/10y/20y), the amount of the SIP (Rs500/ Rs1000/ Rs5000), SIP trigger date and in which frequency the investment will be made (monthly, quarterly/half-yearly).
A filled up ECS/NACH form in which an investor gives the mandate to AMC to receive funds from the bank account for the SIP amount in the specified trigger date.
How the SIP investment is taxed?
From 1st April 2018 tax on equity mutual funds shall be applicable on LTCG above Rs.1 lakh p.a. @10% without indexation benefit. For equity funds, the period of holding more than 12 months is regarded as long term.
While Debt mutual funds with more than 3 years on investment horizon are taxed at 20 percent with indexation benefit.
Those SIPs which continues until the time one redeems the investment and new units gets added to the investor's portfolio.
For equity mutual fund all those units added in the past one year of the SIP tenure and gains on those added units are taxed under Short term capital gains @ 15 percent. For debt funds, the capital gains arising from the units added in the past 3 years of SIP tenure are taxed @ 10 percent.
SIP Investment: Some Misconceptions Cleared
SIP is designed for small investors only: Fact of the matter is, it is suited best for all types of investors from small investors to high net worth investors.
You should not start SIP when the market is high: It is not true, one can start investment through SIP during any market condition. SIPs are purposed to stay invested in for a long time in which all market phase will get factored in.
Once SIP is started, you cannot stop or change the time-period of investment: It is always suggested to track the performance of investment regularly. One can stop, change or redeem the investment mid-way of the SIP tenure.
One can get better returns from timing the market than committing to SIP: The whole process of SIP is for disciplined investing over a long period of time. Timing the market is a very difficult task and depends on many factors. And the probability of success is very low when you are timing the market to gain huge fortunes.
SIP in Mutual Funds: Conclusion
Investment in mutual funds through SIP is a game changing development for the industry and investors. Moreover, it has helped many small investors to become a part of the system who could not afford to invest a lump sum in mutual funds earlier. In SIP, patience and a right fund will work wonders for the investor in long term.
Now, that you know what is SIP in mutual funds. You are also clear on how SIP works and how to start SIP online. What do you think? Is investing through SIP in mutual funds good?
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