3 reasons why you should invest through the SIP route

A Systematic Investment Plan or SIP, as it is popularly known, is a vehicle offered by Mutual Funds to help investors save regularly by committing a fixed amount of investment in a scheme periodically, normally a month. The units are allotted on the basis of NAV existing on the date of investment.

Here are few points in the order of their increasing importance which explain why investment through the SIP route is preferable.

1. Light on your wallet:

Investments in Systematic Investment Plans can be started with amounts as low as Rs. 500/- per month. One can commit the amount as per his choice in multiples thereafter. Hence, it gives regularity in investments without strain.

2. Easier Administration:

Systematic Investment Plans are one of easiest to administer techniques of investment as the investor does away with the need to time the market. The date of investment is fixed and the amount has to be deposited on the same day every month. To further make it easier, schemes offer the facility of auto-debit and ECS (Electronic Clearing System).

3. Disciplined approach:

A majority of investors find it difficult to save and invest on a regular basis. But Systematic Investment Plans help overcome this problem as the investor commits a fixed amount per month and soon inculcates a habit of regular saving by limiting his expenditure.