Benefits of SIP is you can pay at your ease every month and the long term gains are beyond many other schemes. You also get the benefit of diversification and also your money is secured in experienced hands.

Little by little fills the pot

Money creates money, but that doesn’t necessarily mean that you need a large sum of money for a large investment output. While investing in mutual Funds through SIP, you don’t have to invest all at once. You invest by the go and hence your money grows day by day every month. In the present day Economy any person from a peasant to a Teacher, Labour class as well as the business class, everyone can afford to invest Rs 500 every month. This is the minimum amount you need to invest every month in order to construct your own portfolio for long term investment.

Rupee Cost Averaging Benefit

Everybody speculates the market trends but not even the most experienced people can ever foretell the market ups and downs. Whereas, an investment needs consistency to achieve the gains for a long period of time. When you buy mutual fund units through SIP, you keep on purchasing Mutual Funds units every month irrespective of the market trends. Thus, when market goes down, you end up buying more units s per the NAV of the fund and vice versa in case of an upward trend in the market. Thus, over a period of time your investment is balanced and benefits of volatility can be attained towards the maturity.

Disciplined Approach

SIP inculcates the idea of little by little savings amongst the people. As a fixed amount is being deducted from your bank account every month it becomes a habit which goes long way in wealth creation.

The New Day smart investments

With changing time, inflation and trends in the market the investment techniques are also changing. We are approaching towards a technique which is more tax efficient and which yield gains which are compatible with tomorrow’s economic growth trends.

Most Tax efficient tools for your investments

The most important feature of SIP is their tax efficiency. If you’ve invested under Equity Mutual Funds and you don’t take out your money till completion of 1 year from the date of allotment, your gain is tax efficient under Long Term Capital Gains. However, if you decide to redeem your money before completion of 1 year your gain comes under short term capital gain and taxed at 15%. Under Debt Funds, in short term i.e. before the tenure of 3 years if you take out your money then you’re subject to taxes according to your tax slab. Whereas if you take out your money after completion of 3 years you are subject to 20% tax with indexation.

Liquidity and Flexibility

Suppose you decide to redeem your Mutual fund units anytime, within 3 working days you’ll get the whole amount of your investment in your bank account which makes mutual funds the most liquid investment tool.

SIP is doesn’t imply any constraints on the investors. If any month you want to invest more than the fixed amount then such technical system is developed through which you can invest that extra amount on the same or different date of that month under the same folio. Hence, justifying its property of flexibility for the consumer.

Benefit of specialization

The central theme of Mutual Funds is the element of TRUST. When you invest even the smallest amount, it is being cautiously managed and regulated on a regular basis by the fund managers. Hence, with their expertise and experience your money is invested in a more organised and sophisticated way.

Quality and Quantity both can be monitored

It is like you choose your topping for your pizza. You get to decide the quantum of investment as well as according to your long term plans you are guided to choose quality funds which can yield the desired results, thus maintaining both.