SIP stands for Systematic Investment Plan. With SIP you can investment a fixed amount of money into mutual funds every month. This is similar to recurring deposits.
SIP is a great way to start investment because:
- EMI: This is investment into Mutual Funds, with the ease of EMI as you are investing a small amount every month
- Easy: This is the easiest way to start investing in mutual funds
- Security: Since you invest every month effect of market fluctuation gets nullified. Thus providing you steady returns in long term
- No binding: You can stop the SIP anytime you want with the click of a button. There is no lock in for any kind
- Big Savings: A small amount is deducted every month from your account which in turn gets accumulated into big savings
- It is a disciplined saving habit
- It is great for salaried professionals with regular income