Yuva Patrkaar, New Delhi : Welcome to yuvapatrkaar blog. Today I will tell you about SIP. That is, about SIP Meaning. If you also know what is SIP and how does it work. want to know about it. So definitely read this post completely.

SIP is for those people. who are interested in investment. This is its biggest advantage. That you do not need any huge amount to invest in it. You can start it with less money only. If your investment amount is Rs. Then the risk will also be less.

SIP has become very popular in the recent past. It is generally used by investors to invest in mutual funds. Well this was just a small intro about SIP, now I am going to tell you about SIP Meaning.

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SIP Full Form

What is SIP? Before knowing about SIP, let me tell you what is the full form of SIP. So friends, the full flower of SIP is “Systematic Investment Plan (Systematic Investment Plan)” this is a facility. Which is given to the investors by the mutual fund.

What is SIP – SIP Meaning

SIP is a Systematic Investment Plan. Which is a facility given by mutual funds to their investors. Through this, the investor has to choose any mutual fund scheme and invest at the specified time.

If you want to invest in any mutual fund. So first of all you have to choose that mutual fund after which instead of investing huge amount in it, you can do SIP slowly. Arthur can invest small amounts gradually. Because of which the risk in it also reduces to a great extent.

Investors can start investing in Mutual Funds through SIP with as little as Rs 500. Every month a fixed amount is invested in the chosen Mutual Fund from the investor's bank account. The investor is then given a fixed number of Mutual Fund units in return, based on the NAV (Net Asset Value).

If you invest your savings amount in SIP ie SIP. Then you can easily get a regular and balanced wealth. By doing SIP, we can not only increase the amount we save. Rather, through this we can also get tax exemption.

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How does SIP work?

Once you apply for one or more SIP plans. So that amount automatically gets debited from your bank account. Then at pre-determined time intervals, the mutual fund you have applied for. gets invested in that mutual fund.

Thereafter, at the end of the day, you are allotted units of the mutual fund based on the Net Asset Value (NAV) of the mutual fund. With each investment in a SIP plan in India, additional units are added to your account based on the market value.

With every investment, the amount is reinvested. It becomes more than before and hence the returns you get on those investments are also much higher. Ultimately, it is up to the investor whether he wants to withdraw the SIP returns in the middle or at the end of the SIP period.

If you still do not understand how SIP works? So friends, let's understand it with an example -

Let's say you have chosen a mutual fund to invest. And you have also saved one lakh rupees separately. After this you will be given two options to invest. The first is that you invest one lakh rupees in mutual funds at one go or else, you can opt for Systematic Investment Plan (SIP).

You have to set an amount according to your budget to invest in SIP. Suppose, you want to invest Rs.500. Once you have set the amount, every month on the date on which you have bought the mutual fund. On the same day ₹ 500 will be deducted from your bank account and will be invested as SIP in mutual funds.

This whole process will go on till the SIP Period is over. hopefully. Have you understood how SIP works?

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How to invest in SIP

To invest in SIP, you have to follow the following steps –

• First of all open demat account in Upstox, you can download Upstox through download button given below.
• After that complete KYC in it and create your Verify Demet account.
• Now choose the mutual fund in which you want to invest.
• The amount of money you want to invest for SIP. Select that much, as well as choose the Time Period only.
• Then click on the Invest button below.

That's it guys, that's all you have to do. After that you will successfully invest in SIP.

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Types of SIP

There are also some types of SIP. Which are as follows -

1. Top-up SIP

Through this SIP, you can increase your investment amount from time to time as per your requirement. Means when you have more amount then you can increase your investment amount accordingly.

This SIP gives you an opportunity to invest in the best and high performing mutual funds at regular intervals.

2. Flexible SIP

As it is known from its name itself. Investors get the flexibility to invest in this plan. An investor is allowed to increase as well as decrease the investment amount as per his investment capacity.

3. Perpetual SIP

This SIP plan is also very good. It gives you an opportunity to invest without maturing debt. Generally speaking, a SIP plan lasts for 1 year, 3 years or even 5 years. Hence, the investor can also withdraw the invested amount as per his wish or as per his financial goals.

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Benefits of SIP

• The more you invest. The more returns you get in future.
• It is not necessary that you invest lakhs of rupees, you can start SIP with 500 also.
• SIP amount can be increased or decreased according to income, savings and capacity.
• You can start or stop SIP as per your wish. No one's will will work in this except you.
• You can also change the duration of SIP without any restrictions.
• If any SIP is performing poorly. And you stop SIP in it. So that Fund does not charge any fee from you.

Disadvantages of SIP 

• The long-term returns from SIP are lower than the returns from lump sum investments.
• For SIP it is mandatory to have a certain amount in your bank account.
• This is the biggest disadvantage of SIP. That if you do not have enough money in your bank, then the bank can also charge you a penalty.
• Also, your SIP will also be canceled if you don't pay the installment for 3 times.

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FAQs: Frequently Asked Question

1. How old is the SIP?

SIP can be for a period of one year, three years, five years or more. Or depends on the investors.

2. How much return is available in SIP?

What is the return in SIP? It depends on the amount of your investment. The more you invest, the more you get returns.

3. Can I invest 500 per month in SIP?

Yes! You can invest 500 per month in SIP.

Conclusion

So friends, in this post I have told you in detail about SIP Meaning. I hope you have understood well. Also, you must have got to know a lot of new things about SIP.

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