SIP

Discover Financial Success with PTIC India's Systematic Investment Plan (SIP)

What is SIP?

PTIC’s Systematic Investment Plan (SIP) is a disciplined method of investing in mutual funds over time. It involves committing fixed amounts of money at regular intervals, such as monthly or quarterly, to gradually build your investment portfolio.

SIP mutual fund

How does SIP work?

With SIP, you invest predetermined sums of money at regular intervals, allowing you to capitalize on market fluctuations without the need for precise timing. By spreading your investments over time, you mitigate the risk of investing a large sum at a market peak.

Automating your SIP investments streamlines the process, as you can set up recurring transfers from your bank account to your chosen mutual fund, ensuring consistent investment without manual intervention.

How to start SIP investments?

Complete your KYC
Before investors may begin investing, each fund institution asks them to complete the KYC documentation process. You must provide proof of identity, proof of address, and a photograph. The e-KYC option is now accepted as well. Without having to go to the AMC, you can complete the requirements online.

investment

Set your investment goals
The initial step is to figure out what you want to achieve with SIP investments. Make a list of your financial objectives. This is crucial since each mutual fund has a specific goal in mind. Determine your objectives and seek out finances to assist you in achieving them.

investment technique

Select the best SIP
Select the SIP parameters after you’ve chosen a fund. Complete the blanks for questions such as:

  • Investment horizon
  • Investment frequency (monthly, quarterly, semi-annually, etc.)
  • Amount of investment
  • Based on your objectives and financial circumstances, fill in the required information.

Benefits of investing in mutual funds via SIP

No need to worry about market volatility

Markets are a reflection of the economy, and just as the economy experiences ups and downs, so do the markets. While a drop in the market can wipe out some of your gains, a SIP can make these drops work in your favor.

Here’s how to do it. Because you invest every month, your buying price varies, and you receive a different amount of units each month. Therefore, when the markets rise, the price will rise monthly, and you will receive fewer units. When the cycle reverses and markets begin to decline, the purchase price drops, and you begin to receive more units for the same investment. Rupee Cost Averaging is the process of investing at different periods of the market to average out the costs.

SIP mutual fund

Build investing discipline:

When you spend first rather than consider investing, it’s difficult to save. Interestingly, the lazy investment strategy of SIP instills financial discipline in your life. You can implement the golden rule of financial planning by using SIP to save first and spend afterward. All you have to do now is choose a monthly SIP date that coincides with your salary date. And before you start spending, you’ll wind up investing every month.

Helps build huge corpus with small amounts

You’ve probably heard the adage that “small drops of water build a huge ocean.” It simply indicates that remarkable things can be accomplished by combining a small number of small things. These modest, magical things are known as Systematic Investment Plans in the investing world (SIPs).

When you invest in a mutual fund on a regular basis through a systematic investment plan (SIP), your overall investment amount grows over time to a sizable corpus. The benefit of compounding is one of the main reasons for your corpus’s growth. Because mutual fund returns are reinvested and you get returns on your returns, you profit from this simplest yet significant force known as compounding.

Benefits of investing in SIP

  1. Power of compounding: When the returns earned on your investments begin to generate returns, this is known as compounding. In theory, this is a straightforward concept. However, it has significant practical ramifications.
    Your returns are reinvested when you invest on a regular basis through SIPs. This will have a snowball effect over time, potentially increasing your prospective returns by a factor of ten. Investing over a long time is an excellent approach to maximize this profit. This also indicates that investing as soon as possible may be advantageous.
    Even a 10-year head start can make a significant difference in your profits.
  2. Convenience: SIPs are an easy way to invest. You may not have the time, like other investors, to conduct thorough market analysis and research in order to change or optimize your portfolio. So, once you’ve chosen a decent fund, you can give the bank standing instructions and let the SIP handle your monthly investments.
  3. Low initial investments: With just Rs. 500 each month, you can start investing in mutual funds through a systematic investment plan (SIP). This can be a cost-effective approach to invest monthly without breaking the bank. With the SIP step-up function, you can boost your monthly investment amount as your income rises. Investors can upgrade their SIPs on a systematic basis with mutual fund houses. So, even though you start with Rs. 500 or Rs. 1,000 per month, you may gradually increase your investment over time. This method can assist you in achieving your investment objectives more quickly.
  4. Rupee cost averaging: Rupee cost averaging is a strategy that involves buying more units when the fund’s Net Asset Value (NAV) is low and fewer units when the NAV is higher. Consequently, it balances out your acquisition costs across the investing time. When you invest through a SIP, you don’t have to worry about market timing.
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