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Systematic Investment Plan - (SIP)

What is Systematic Investment Plan - (SIP)?

Systematic Investment Plan (SIP) is a mode of investment that allows you to invest a certain sum into investment products like Mutual Fund, at predetermined dates, through the auto-debit system from your bank account. Your Fund Manager purchases units at the prevailing NAV and the same are credited to your Mutual Fund account.

Online SIP investment helps in building healthy fiscal discipline through forced savings, and you are allowed to choose the dates of investment at your convenience. This mode of investment helps you to accumulate wealth and achieve your financial life goals through a planned and well-defined approach.

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When you invest in Mutual Funds through SIP, you can benefit from ‘Rupee cost averaging’. This means you buy a larger number of units when markets are low and a smaller number of units when markets are high. This averages out your total cost.

However, before you start your SIP online, it is important to conduct a thorough research about the best SIP plans in India and to be informed about factors like SIP returns, type, tenure, etc.

ICICI Bank Limited is an “AMFI - Registered Mutual Fund Distributor”

What to look for in an SIP plan before investing?

SIP plans help you to invest a fixed amount of money at a predefined date in Mutual Funds. They help inculcate a disciplined savings habit. While there are many SIP plans to choose from, zeroing on the best requires factoring in the following:

Returns over a long period

Ensure that the fund in which you invest generates returns. Hence, before starting a SIP scheme, find out the long-term returns of the fund. See how the fund performed across market cycles, its benchmark index and peers.

Fund fundamentals

While investing in a fund, robust fundamentals of a fund are very essential since there are funds which may expose itself to risky underlying assets thereby, increasing the risk of the scheme.

Fund objective

Every Mutual Fund has certain objectives. Hence, it is important to align the fund objective with your investment goal. For instance, if you wish to build a contingency fund, you can invest in Liquid Funds. Similarly, if you desire to build a feasible retirement corpus, you can opt for Equity Funds.

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Benefits

The growing popularity can be attributed to several benefits of SIP investments such as:

Building financial discipline

Discipline is the cornerstone of a successful investment career. Systematic Investment Plans, through their automated, periodic investment approach, builds in you a forced savings habit.

Securing long term financial gains

A Systematic Investment Plan benefits from the power of Compounding and Rupee Cost averaging. If you choose the right investment product and stay committed to your investment goals, in spite of small commitments, you will be able to build a considerably large corpus to address your long term financial goals./p>

Flexibility

Systematic Investment Plans are tailor-made to suit the level and nature of your income and investment objectives. By use of SIP calculators or by availing of the help of professional Investment Advisors and Financial Planners, you can find the SIP type that best suits your needs without impacting your cash flow.

A suitable investment mode

Choosing the right product and SIP type as per your investment goals and risk taking capacity can help you in the long term. Professional management is an important benefit of Mutual Fund SIP.

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Disclaimer: Mutual fund investments are subject to market risks, please read all scheme related documents carefully. ICICI Bank Limited shall not be liable or responsible for any loss or shortfall resulting from the operations of the Mutual Fund scheme. Terms and conditions of ICICI Bank and third parties apply.

ICICI Bank Limited is an “AMFI - Registered Mutual Fund Distributor”

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