Mutual funds is a good investment option. Only saving does not help you need to invest your money to realise your goals. Investing a fixed amount regularly in mutual funds can help you reach your goals. Systematic Investment Plan (SIP) allows you to invest in a disciplined way in mutual funds.

Systematic Investment Plan (SIP) allows you to invest a fixed amount of money regularly in mutual funds. You can invest quarterly or monthly in mutual funds. You can invest a small amount of money regularly in mutual funds over a period of time to reach your goals.

Investing monthly can gradually turn you into a disciplined investor. SIP plans supports power of compounding. In compounding you can earn interest on the initial invested amount as well as the previously earned interest. The longer you invest the more the effect of compounding. It is convenient to invest every month a small amount of money without affecting the household budget.

Why SIP?

There are many reason to invest through SIP. They are:

• It is convenient as it is an automated process.
• It brings discipline to your investments as you invest regularly. It makes investing a mandatory component when you allocate your resources.
• As you invest a fixed amount you can buy more unit when the market is low and less when the market is high. This brings down the average cost of acquisition of units.
• As you invest regularly you do not have to time the market. The long term investments do not get affected by market fluctuations.
• It offers the flexibility to invest quarterly or monthly as per your convenience.

SIP plans

You can easily achieve your goals by investing through SIP. It is a smart way of investing rather than the traditional saving instruments. Channelising your funds into investments is a better option than keping funds idle in the bank. Investing regularly a fixed amount over a period of time can make a significant effect on wealth creation.

You can begin with a small amount and increase it later on. You can increase your SIP amount any time. There is a SIP Booster facility which allows you to increase your SIP anytime. You just have to register for the facility. To increase the SIP amount you only have to give the instructions to do so.

You should increase your SIP periodically to give your regular SIP investments a boost. You should increase your investments as your income rises. You should increase your investments in the same proportion as the rise in your income.

You have to be patient when you invest through SIP and you should stay invested as long as you can. You should be disciplined once you start investing.

The author likes to blog on the mutual fund topics. The author has enough experience in investing in mutual funds. Here the author has discusses the SIP plans and its benefits.