Reasons Why Sip Is The Best Way To Invest In Mutual Funds

Did you know that according to AMFI, mutual funds in India currently have 5.05 crore SIP investor accounts? Well, this isn't surprising. After all, it is the easiest way to invest in mutual funds and generate wealth over time.

Today, you can conveniently start investing online with the fund of your choice. You can choose how much you want to invest, set the frequency, set up auto-debit mandates, and monitor your portfolio online. You can sell your mutual fund units whenever you like, stop investing at any time, and even start a new plan. And so, an online systematic investment plan allows you to be in control of your finances and remain stress-free.

But wait! This is just one of the many reasons countless Indians swear by SIPs. Want to learn more about how they ensure smooth sailing as you achieve your financial goals? Keep reading.

Small investment amount

Most mutual fund schemes allow you to get started with as little as Rs. 500 per month. So, if you have just started earning, it is the best way to invest in mutual funds for you.

High flexibility

If you started with a small amount, but your salary has since increased, you can increase the investment amount. You can even start a new SIP in the same mutual fund scheme.

Additional Read: How SIP Returns Helps in Meeting Your Long-Term Goals

Instils investor discipline

Most investors are quick to start but often struggle to keep the investing going for a long period. But, a systematic investment plan can make you more disciplined.

The best way to start SIP and make regular investments is by setting up an auto-debit mandate. In this way, your amount gets deducted automatically, and you don't have to worry about missing instalments.

Rupee cost averaging

A systematic investment plan eliminates the need to time the market before entering. Why? You regularly invest a fixed amount, irrespective of the market conditions.

Thus, you will get more fund units if the market is down and fewer units if the market is up. In this way, you reduce the average cost of purchasing your mutual fund units. Hence, in the long run, the average cost of purchasing the units is less than making a lump sum investment when the markets are running high.

Power of compounding

If you select the growth option when you start investing, the returns you generate are added to your investment amount. This total amount is then reinvested. This results in the compounding effect, which allows you to enjoy higher returns in the long run.

Safe and transparent

Every fund house and AMC has to abide by SEBI's rules and regulations. So, if you are a beginner investor, let go of your worries and rest assured that it is safe to invest in mutual funds online through a systematic investment plan.

Additional Read: Best SIP for Long Term Financial Goals

Ready to invest?

Since mutual funds are a long-term investment, start your systematic investment plan early.

The best way to invest in SIP online is through a trusted mutual fund platform, such as Tata Capital's Moneyfy app. Set your financial goals, assess your risk appetite, and browse the ideal mutual fund options for you. Start investing, and manage your portfolio online. Download the app today.