sip mutual fund
  • Some Myths about Mutual Fund SIP Investing

  • Published By:
  • Category: Finance
  • Published Date: April 6, 2023
  • Modified Date: April 17, 2023
  • Reading Time: 3 Minutes

Featured Image Caption: SIP Mutual Fund

Investment is a great vehicle of converting savings to investments and grow a corpus that would help one in the future, in case of emergencies or for completion of long-term financial goals. It is imperative, especially in today’s times, to save, invest and grow one’s wealth, to have a strong financial standing. The best time to invest is always when you start earlier, at a young age or while working, to make sure that a sustainable corpus is built. It takes immense patience, time, and right guidance from a financial advisor to finally get to your dream goal amount that would be a cushion to fall back on, during exigencies. In this regard, mutual fund investing is of great help due to the benefits of power of compounding, customised investing, transparent process, convenience and more. The most popular way of starting your mutual fund investment is with the help of a SIP.

If you wish to invest in SIP, the process can be started either online through the website of the AMC or offline, through filling a form with the concerned AMC. Either way, SIP investment plan is a good steppingstone for new investors who wish to explore the mutual fund space more. However, there are some common myths about SIP to be noted:

SIP offers guaranteed returns

This is the common misunderstanding when the common man wants to invest in SIP. Since returns from mutual funds is based on market conditions that fluctuates with time and events, the returns are not fixed or guaranteed. One needs to be patient, financially disciplined in order to reap benefits from SIP.

SIP is for small investors only

This is not true as one can invest any amount that they like, through an SIP, with a chosen frequency and tenure and without any limit.

SIP is only for equity funds

Investors think that SIP can be possible only in equity mutual fundschemes- but this is not true. You can make periodic investments in debt funds- such as low duration, liquid, ultra short duration funds as well. The choice purely depends on your capacity to take risks as an investor and your financial goals.

Modification of SIP is not possible

Another common myth regarding SIP investment plan is that it cannot be changed or modified once it starts. But it can be. The periodic amounts can be increased with the help of SIP top up and the tenure of investment can be extended as well.

Now, to calculate SIP returns, a useful tool is available at one’s disposal called as the SIP return calculator. SIP calculator helps one to know the expected corpus of your SIP after a certain period of investing, giving them clarity to start the process. Another way of making SIP investment plan sounder, one can use the financial calculator called as the target SIP calculator. This tool tells you how much to invest each day, month, or quarter, to reach your financial goals. One can calculate SIP returns, as an estimate, to know how to do better investment planning in an informed way.

SIPmutual fundsare a hassle free way of stepping into the world of mutual fund investment and grow one’s wealth.

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