What is SIP in mutual funds? What are benefits of SIP investment?
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SIP allows you to invest a certain pre-determined amount at a regular interval (weekly, monthly, quarterly, etc.). In SIP your money is auto-debited from your bank account and invested into a specific mutual fund scheme. You are allocated a certain number of units based on the ongoing market rate (called NAV or net asset value) for the day. Here are some major benefits Disciplined Saving- When you invest through SIP, you commit yourself to save regularly Flexibility- While it is advisable to continue SIP investments with a long-term perspective, there is no compulsion. Investors can discontinue the plan at any time. Convenience - SIP is a hassle-free mode of investment. You can issue a standing instruction to your bank to facilitate auto-debits from your bank account.