The article briefs about SIP and SIP calculator
What is the meaning of SIP?
A SIP is a systematic investment plan which lets you invest a fixed amount periodically in a mutual fund. For example, if you start a monthly SIP of ₹100 in a mutual fund, that amount will automatically be deducted from your bank account and invested in that mutual fund every month on the pre-decided date. SIP is essentially an automated investing plan.
Why invest through SIP?
SIP gives the benefit of unit cost averaging nullifying the impact of market volatility. It is a disciplined approach to investing which uses the power of compounding to build wealth in the long term.
Did you know that just ₹ 10,000 invested per month in HDFC Top 200 from Jan 1999, would have given you ₹ 1.7 crores TAX-FREE* on 1st July 2016!! FD would have given approximately ₹ 40 lakhs post-tax. Still looking for FDs?
*Equity mutual funds had Zero LTCG tax till 31st April 2017. From April 1, 2018, there will be 10% LTCG tax on gains withdrawn above ₹1 lakh in a financial year. In spite of this, post-tax returns from equity mutual funds remain substantially higher than FD returns.
Use the SIP return calculator to calculate the wealth gain and expected returns on your SIP investments.
Is investing in SIP a good idea? What are the benefits of investing in SIP?
Yes, investing in SIP is always a good idea. It keeps you disciplined, is easy to monitor, takes advantage of rupee cost averaging, can be increased or reduced anytime.
SIP is considered the best investment habit because of the following reasons:
- Flexibility-Increase or decrease the investment amount according to your convenience
- Liquidity-Withdraw the investment amount when you need it
- Simplicity-Simple and disciplined way to create wealth
- Inflation-Proof- Regular interval investment reduces the impact of inflation on savings
How does SIP Calculator work?
SIP returns are calculated according to compound interest. You can enter the amount you wish to invest every month, choose the number of years you wish to continue the investment for, and our calculator will automatically calculate the amount of return. It will also show you a comparative your SIP return vs Fixed Deposits. You can also enter the target amount you would like to achieve and can rever calculate the SIP amount required to achieve it. You can set a return rate(Equity 15 %, Debt 8 % Balanced 10.5 % ) or choose a mutual fund and calculate the SIP Returns.
How long should I invest in SIP?
There is no fixed rule for this but a SIP for five years and above, especially in equity or ELSS mutual funds have a low risk for loss. Short-term investments in these funds can have higher returns but also come with a high risk of loss.
Is SIP safer than lumpsum investments?
Yes, they are much safer. Since the markets go up and down (volatility) your investments in a SIP carry much lower risk as the investment points are spread out over a long tenure. When the markets are high, you buy fewer units of the fund and when the markets are low, you buy more units for the same amount.
How to invest in SIP? What happens once I have opted for a Systematic Investment Plan (SIP) investment with Upwardly?
Once you have opted for a SIP through our platform, upwardly would send you an email with the procedure to add Bombay Stock exchange (BSE) as a biller on your bank website. This is just like adding utility payments like Electricity/Water/Phone on your banking website. Please remember to add BSE as the biller and not the Mutual Fund that you have invested in. It’s a 2-minute process at your end and you can easily do that on your own. Typically it takes 3-5 business days for the SIP mandate to be approved by the bank. Once that is approved, your monthly investments would start. This is a completely paperless process.
Just in case your Bank or the Mutual Fund (that you have opted for) do not have this option, we would be sending you a NACH mandate form through email. This NACH mandate form needs to be signed by you. Please ensure that you do not make any other modifications on the NACH mandate else your Bank would reject your NACH mandate. Once you have signed the NACH mandate, our logistics partner would contact you and pick up the NACH mandate, and that would be sent to your Bank for registration.
Once your Bank has registered this NACH mandate, the amount of your investment would be debited every month from your account and sent to the AMC for investment. Typically, the banks take 15 – 20 business days to approve this mandate. You would have the option of stopping or pausing this SIP through Upwardly platform as per your choice. You can also directly stop this SIP with the AMC.
What are the best fund schemes to invest in SIP?
Equity Mutual Funds, ELSS and Balanced Mutual Funds are one of the best fund schemes to invest in SIP. All of these are meant for the long-term and hence a SIP allows you to stay invested in them without worrying too much.
Which is the Best SIP in India 2019 & 2018?
The Best SIP (Systematic Investment Plan) in India as per the latest ranking are the following:
TOP 5 EQUITY MUTUAL FUNDS for SIP 2019 & 2018 SEE ALL EQUITY by RANK
|Rank||Fund Name||Return(5yrs)||Doubled In||Rs. 1L Grew to|
|1||Mirae Asset Emerging Bluechip Growth||25.58%||3Yr 1Mn||₹3.12L|
ICICI Prudential Banking and Financial Services Fund Retail Growth
Canara Robeco Emerging Equities Growth
|4||SBI Small Cap Fund Regular Plan Growth||28.13%||2Yr 10Mn||₹3.45L|
|5||Mirae Asset India Equity Fund Regular Growth||18.37%||4Yr 2Mn||₹2.32L|