A SIP means Systematic Investment Plan is the most effective way of growing wealth. It allows an investor to invest small amounts periodically in a mutual fund scheme – typically monthly, although one can invest daily, weekly, quarterly. SIP is offered by mutual funds to investors.
| Input | Description |
|---|---|
| Amount Invested | It is the investment that you want to do for every month till the end of your investment years. For eg. if you want to make SIP of 15,500/- every month you have to pay 15,500/- till the end of your investment years |
| Expected Interest Rate | This is the percentage return per year at which you want to invest your amount for decided time duration |
| Time Duration | The duration in years for which you want to invest |
| Output | Description |
|---|---|
| Monthly Investment | This is decided SIP amount that your will invest every month till the end of investing years |
| Total Investment | This is your total investment till the end of your investing years |
| Interest Earned | This is the interest you will have by the end of invetment years |
| Future Value | This is the total amount yu will receive which is sum of yout total investment and the interest you will be gained |
To start a SIP you need to fulfill the Know Your Customer (KYC) requirements. You can also call it KYC. It is a must to invest in mutual funds. You will have to submit your identity proof, address proof and a photograph. You should also confirm your physical existence through an In-Person Verification or (IPV).
SIP works like a recurring investment of a fixed amount. Systematically invests a small amount of money in mutual funds at regular intervals by instructing your bank to periodically auto-debit your account with the SIP amount. SIP enables you to regularly increase your investment amount by a fixed amount and get the benefit of compounding.
SIP return is taxable or not, depends on the type of mutual fund and scheme in which you invest and when you redeem your investment.Generally returns from the equity mutual funds are non-taxable when redeemed after one year of the investment.
Yes, you can change your SIP as per your convenience. To increase the SIP amount – Start a fresh SIP with the increased amount. To decrease the SIP amount – Cancel the existing SIP and then start a new SIP with the new amount.
SIP is good, but before that you have to choose mutual fund that best suited you to start SIP.For that You need to check certain parameters such as such the expected returns, risk, average Assets Under Management and some more.