SIP - ONE INVESTMENT PLAN WITH MANY BENEFITS:

Every person in today’s world want to earn some extra benefits. Sticking on just one source of income is not in practice now and of course, cannot be because of the hike in inflation rates. For earning more one need to get indulged in more than one source so as to get some extra earnings.
All of us are very much aware about the the concept of investment as well as the yields associated with it. Yes, we want to get maximum return on our investment with limited or no risk. Here comes the need to plan a proper investment so that we could get what we want.

INVESTMENT PLAN - DO YOU KNOW WHAT IT IS?
Planning is, thinking in advance about future scenario and then coming up with a strategy as to how we can achieve our goals in the future.
Accordingly, Investment Plan is a strategy of making investment, which is made for the future to earn maximum profits.

CHOSING A BETTER PLAN!
Which is a better plan?
The answer to this question cannot be in one or two words. This is because every one plans with some different objectives. For some, good returns with no risk is the main objective while for others the aim can be to earn high yield only.
But, in general sense, if we talk about the benefits of the investment plan, a better plan can be proved to be the one and only, which

• provides for comparatively high returns
• are less risky
• are safe and secured 

Why SIP (Systematic investment plan)?
Anything, which is done in a systematic way is proved to be efficient and effective. Similarly, the very concept of SIP is to provide for an effective and efficient plan of investment to the investor.

SIP,

• where one can start investment with a lesser amount of Rs 500 only per month.
• Periodically, a certain amount is debited from the bank account of the customer which is put into an investment project.
• Investor is benefited with the compounding power of the scheme.
• It also provides for cost benefit due to the rupee cost averaging concept associated with it.
• Early the investment more shall be the benefit it will fetch due to the compounding power.

Major benefits of SIP

Rupee cost averaging - We cannot predict the movement of market that whether it will go up or down. Even, the professional cannot provide us with the future fluctuation rates because they are very uncertain and depends on many different factors.
Rupee cost averaging here provides us to out of the guessing game of trying to buy less and sell high.
We can understand this concept with an example,
Suppose you invest Rs.1000 every month and NAV(cost) of the unit is constantly changing (increase or decrease), hence at the end of the year on calculating we will come to know that on an average basis we have invested less and earned higher as compared to that in case of lump sum, where the whole investment is made at one time only.
Accordingly, under the SIP scheme advantage of market dips can be taken.
Under this, the money shall buy more share (units) when price reduces and less when price increases and on an average shall provide for lesser cost.

Power of compounding - Compounding concept of finance refers to earning interest on interest. Under this, the investor earns interest on the principal amount and an additional interest on the interest so accrued on the principal amount.
An example for this can be , say you invest Rs 10000 at a simple interest of 10% for 10yrs. After 10yrs you will earn rs.20000.
On the contrary if you invest Rs. 10000 at 10% compound interest for 10yrs then after 10yrs you will earn Rs.27070 which is higher than simple interest.
SIP also provides for this compounding benefit as the interest earned on SIP is compound interest only.
To get benefited with the compounding scheme the investment shall be made for a longer period of time. Longer the period of investment, higher the amount of interest.

Less burden on the investor - one more important benefit of investing in SIP is its minimum capital investment limit.
This means in SIP an investment can be made by starting with an amount of just Rs.500 or Rs.1000 pm and this is really helpful for the less income groups.
So, we are not bound with any minimum capital requirement under this scheme.

Hassle free process - SIP does not require a regular attention of the investor. Once you are enrolled under the scheme, you can allow your bank to debit the amount automatically from your account and make investment.

This is how SIP can be a best investment plan for you. So just don't think more and start investing now via My SIP Online to earn a bundle of benefits.

Systematic Investment Plan: Better option for monthly saving

Systematic Investment Plan or SIP is one of the two methods of investing in mutual funds. The investors who were earlier unwilling to make one-time investment due to the involvement of a large sum in spite the desire to invest now have the option of investing in regular installments of SIP. The reasons can be any like, low income, the philosophy behind investment and many more. Keeping in view the restrictions that the clients faced while investing a lump sum, mutual fund experts felt the urgency to devise such a plan which could attract more and more investors who otherwise kept a distance from investing. SIP is similar to recurring investment but far better than that in many ways.

How SIP is better than other saving options?

As we all know that saving is entirely different from investing. But, many people equate RD and SIP. It is an entirely a wrong practice. To understand the vast difference among the two options the following points must be read:

• There are no time restrictions in SIP. As, there is no minimum or maximum period defined for sip investment. One can invest for longer duration in equity-oriented schemes while liquid funds help to invest for relatively shorter time duration. Unlike, other investment methods which have some minimum and maximum stipulated time-period. 
• The client doesn’t need a bulk amount, for investment. The idea behind investing through SIP is to reduce the burden of one-time investment from the shoulders of the client. But, you require a lump sum to invest in other options available for investing, like FDs. 
• An investor is free to withdraw the invested sum (after lock-in period if any), as and when required. There is no entry or exit load (in some schemes there is 1% exit load). But, if you withdraw your money from FD/RD before the maturity period, you will have to pay a penalty for it which will be deducted from the amount which the client had invested initially. Therefore, incurring a loss in the principle amount.
• SIP can be paid automatically through the bank account of the investor, making use of the facility called auto-debit/ECS. The investors need not go again and again to withdraw and deposit cash. But, same is not applicable to FD. An investor has to go to the branch repeatedly, either to commence the investment or to withdraw it. Standing instructions can not be given for same. 
• Systematic Investment Plan brings about financial cohesion. It is possible because the investor knows he/she will have to spare a certain amount for the purpose of investment. This automatically brings the income and expenditure in proper shape. But, in other investment options like FD, you have to accumulate money. The idle money in your account, during the process of accumulation, will attract you to spend it.

With the growth of technology, using SIP has become even more comfortable. SIP was designed as a method of investing in the mutual funds which followed a regular installment method. Now, you can use the auto-debit option to get your installment for SIP debited from your saving bank account. Just give a standing instruction to your bank for debiting the amount and from thereon you need not have to remember the date of paying SIP. You can also select your scheme through the various investing options provided by the AMCs. Now, it has become more easy for the investors to plan and pay their SIP installments.

Get a better insight for organizing your investments

Have you ever seen a construction site? It is amazing to see how a sky-scraping building is constructed by placing the bricks in the right places. “Take care of small things and big things will automatically fall in place”, is a traditional saying which emphasizes on streamlining the tasks which appear to be small but produce a greater impact over the time. For example, for attaining a building, according to the plan, each brick has to placed accurately.

In the same way, investing is an activity that requires consistency and patience to attain desired gains. Mutual funds have been serving as one of the most secured ways of investing in stock market, bonds, securities, tax savers, etc. The clients can fulfill their needs with the help of investing in any of these instruments. Along with providing varied avenues of investing, mutual fund provides two methods through which the clients can place their money in any of the selected scheme viz, Lump Sum and SIP (Systematic Investment Plan).

What is SIP?

It is a method of depositing small amounts on a regular basis in any of the schemes selected by the clients. SIP was initially introduced to make the investment process easier as numerous clients are willing to sacrifice a huge sum at a time. This mechanism not only waves off the burden from the client’s shoulders but also makes it easier for him/her to invest more frequently. By investing as low as Rs. 500 through SIP plans clients can enjoy to accumulate a huge corpus over a prolonged period.
Top five SIP plans for 2016

There are a lot of mutual fund companies that provide innumerable schemes to the clients for investment. According to client’s risk-appetite and investment needs the clients can choose any of the schemes to invest their hard-earned money. The mutual fund experts mark some funds as the top SIP plans on the basis of the report of past 5-year performance, NAV index, Portfolio assessment, and Profit/Loss analysis report. There are following plans which have been rated to be the top five plans of 2016 in India:

1. DSP BlackRock Micro Cap Fund: It is an equity-oriented scheme which invests in small-cap and mid-cap companies. This scheme intends to apprehend the profits based on long-term growth potential of the newly established companies. Every small-cap and mid-cap company is in the initial years of business and consists the capability to make progress. DSP BlackRock Micro Cap Fund was initially launched in the year 2007 and has been able to mark its presence in one of the five top performing SIP funds. The AUM of the fund is Rs. 2,004.13 Cr which shows the popularity of the fund. The various options available under this top performing mutual fund in India are Growth, Dividend, Payout, Reinvest. There is an exit load of 1% for the investors who withdraw their money before the period of 12 months. 
2. Tata Balanced Fund: A balanced fund is one of the funds lying under the hybrid category whose major investments are in equity and relatively less portion is being invested in money market instruments. Equity investments provide the much-required growth of funds through capital appreciation while on the other hand, money market instruments facilitate fixed income benefits. Tata Balanced Fund is one the top performing funds under the hybrid funds category. The scheme is an open-ended fund and has 65:35 ratio of equity and debt respectively.         
3. ICICI Prudent Value Discovery Fund: This scheme is an open-ended diversified equity fund. Money invested through this fund is wisely diversified across various sectors of out economy like pharmaceuticals, banking, IT, etc. The fund manager contains a list of all those companies that are fundamentally strong and have ethical approach along with offering affordable stock prices. Hence, extending the benefits of capital appreciation over a long period.
4. Axis Long Term Equity Fund: It is also categorized under ELSS category. It has a three year lock in period and was started in the year 2009. There is no entry and exit load and it is an open-ended scheme. The scheme invests in sectors like banking, finance, consumer durable, etc. In a short span of seven years Axis Long Term Equity Fund has been able to make an impression among the investors and attain a position among the five most preferred SIP funds. 
5. L&T India Value Fund: The scheme aims at generating long-term capital appreciation by providing a diversified portfolio of equity and equity-related securities. The Scheme also invests in Foreign Securities in international markets along with the advantage of providing growth and dividend options.

Therefore, the clients should adopt SIP as their mode of investment which will undoubtedly help in accumulating wealth penny by penny over a long period of time. 

SIP - A Ladder Towards Dream

There are two methods by which one can invest in mutual fund. First is lump sum through this method the client can invest an enormous amount at one time. Second is Systematic Investment Plan (SIP). In this one invests a fixed amount at regular intervals.

SIP Investment Plan is an investment methodology presented by mutual funds to its investors. By SIP one can invest a fixed amount in mutual fund bit-by-bit on monthly or quarterly basis for a period of time. It gives the privilege of compounding to the investors. Power of compounding is shown in better way when the amount is invested for a long duration. Whenever fresh sum is invested in SIP more units are combined in investor’s account. It presents the advantage of rupee cost averaging.

Rupee - Cost Averaging

Predicting the ups and downs of the market is a challenging task. Once the client invests in SIP he can be free from this game. It is the best way when one opts it for a long run. A unit in mutual fund is just like the shares of a company. It represents the degree of ownership in mutual fund. An investor will get more units when the prices are low and less units when the prices are high. It simply means that investor will average his/her profits over a long spell of time.

Power of Compounding

Albert Einstein quotes,“ Compound interest is the eighth wonder of the world. He who understands it, earns it, he who doesn’t, pays it.” For gaining maximum output from SIP you have to start as soon as possible, maintain continuity of your investments and be patient. Because even a small seed takes time to grow and give fruits.

Systematic Investment plan vs Recurring Deposit

Structure
RD is a method of regular saving provided by banks and post office. The duration of RD period can vary in between 6 months to 10 years. It is like fixed deposit account but for the monthly investment. Unlike, RD the investor invests money in periodic intervals instead of a single lump sum payment. By doing this the investor will get the units of mutual fund depending upon the Net Asset Value. Whenever the NAV gets changed the clients will receive different units accordingly.

Risk Involved
RD is a secured investment method because the amount is deposited in banks.
On the other hand, SIP invests in equity or debt fund so little bit risk is involved but for long term it provides adequate safety with high return.

Return
RD is a saving hence in return person will get only his saved amount plus interest. In an SIP the amount is invested in mutual funds and the return will depend upon the asset allocation.

Why one should go for SIP

• A lot of people start investing with great interest and are discouraged after some time. A systematic investment plan helps them to save on regular basis. So, it encourages discipline in investment.
• No extra burden on wallet. 
• Your investment get the returns from the first day.
• SIP can be weekly, monthly or quarterly depending on investor’s preference.

An SIP plan gives a number of schemes that makes an investor comfortable and presents a good experience of investing. It is a very fruitful method of investing even for the small investor without any difficulty. 

Systematic Investment Plan is bringing about a revolutionary change

It is rightly said, “ Each revolution begins with an Idea”. No change can be made in a single day. It takes a long duration to conceptualize any idea. Identical is the case with the investing industry. The emergence of Systematic Investment Plan (SIP) on the horizon of the mutual fund industry is a revolutionary concept. Making it tough for its rivals like RD (Recurring Deposit), SIP is fast emerging as a fertile source of planned monthly investment. The SIP has been the prime focus of the investors who want to invest consistently over an extended period of time. Just like its name Systematic Investment Plan, actualizes itself in the application also. SIP is nothing but a regular installment that an investor pays for a prolonged period to enjoy a good corpus.

But, SIP should not be confused as an investment itself. Technically, SIP is just a method of investing in the online mutual funds; it is not an investment. Many times people start believing that Systematic Investment Plan is the scheme in which they are depositing their money. Such is not the case. SIP is a facility extended by the mutual fund industry to those investors who are not comfortable with lump sum investment.

Comprehending the concept of NAV in SIP

SIP is nothing but a regular investment in the capital market through a more secure network (Mutual Funds). The installment that a client pays on a daily, monthly or quarterly basis is pooled up with all the other investors money and finally put in the capital market. For each installment the client deposits as SIP, he/she gets some units of a scheme. These units are similar to the shares that one gets on investment in stocks. The units are allotted on the basis of NAV (Net Asset Value). NAV is the price per unit of any particular scheme prevailing on a certain day. In simple words NAV is the cost of buying one unit of a scheme under the mutual fund. It alters as the market fluctuates. The closing NAV for a certain day is taken as the NAV for that particular day.

Focusing points for investors :

The investors need to focus on some of the points so that they do not error while investing. They are the following:

• Don’t invest and forget: Timely monitor the performance of your Systematic Investment Plan. It is your money, and no one can take care of it like you. When you examine SIP on regular intervals, then the chances of loss become negligible. At the same time, you need not be too conscious.
• Diversify your investment: Never take up identical plans for all your investments. For example, in one scheme you can take a monthly SIP, for another you can opt for a quarterly. If you have all identical SIPs, then it will pressurize you. You will have to pay a lump sum but in a disguised form. Warren Buffet indeed said, “Don’t put all your eggs in a single basket”.
• Never take star rating as the benchmark: The star rating is no benchmark for investing in the SIP. The score keeps varying on the monthly basis. You need to understand that the choice of schemes should center on the requirements of investment and not on the rating it earns, as it keeps varying.

Bearing in mind, the simple steps of investing you can attain copious profits. A smart investor can make more progress than a hard-worker. Now is the world where we need to manage our wealth wisely and smartly. Therefore, don’t just focus on earning money, invest to multiply it fast. 

Organize your investments in savings for better future!

The D-day has come, and you got that paycheck you have been dreaming of always! So, what are you going to do it? Even before I complete this question, a series of plans would already have rolled out in your mind - parties, shopping, making gifts, ahem! Though I don’t want to spoil this fairy tale, but why not think of starting an SIP plan too?

‘SIP plan, what is it?’ - Well, if I give you a forensic analysis of this term, it is an investment program run by asset management companies through which they invest the money into a variety of assets such as securities, debt instruments, etc. Feeling bowled over? Then read this. You give a fixed amount every month to a scheme of a fund management company. The fund manager invests that money on a variety of projects and gives the money back to you with returns earned on it. Isn’t it simple?

‘Why not should I keep the money in my bank account?’ - another query, just as expected from a beginner. I would suggest, why not make a mix of some money put in bank and other in mutual funds and other investment avenues? While banks give you only a fixed annualized return, mutual funds are known to deliver better returns.

If you go by my experience, the investors have earned 15-20% more returns as compared to what offered by instruments like fixed deposits and savings bank accounts. There is a lot of literature available with every asset management company that gives transparent view of how they had fared over a period of time. Comparing maturity value of fixed deposit and mutual fund scheme for the same time period can help you find what the fate of your money will be.

‘Is there any way by which I can plan my investment in mutual fund with more cognitive approach?’-  Certainly yes! Looking at the growing curiosity of investors towards the mutual funds, the intelligent brains have developed SIP calculators that give fair idea of the future value of the investment. Some common variables required to develop an SIP calculator are:

1. Amount you can invest per month
2. Rate of return you want to achieve (try being a bit realistic here)
3. Number of years 

SIP calculators are very handy and all the work at the back-end is done by the experts who apply the rules of compounding and exponential growth that worked behind the scene while your investment grew up to bring that grin on your face. He who laughs the last, laughs the longest - when various financial troubles keep on jostling your boat, the small disciplined investment made in SIP gives you all the peace that you deserve after bidding your work-life adieu.

Thus, use SIP calculator and organize your investment. Investing in SIP is possible online too. Growing security of cyber world and ease of usage has driven people towards online tools where they provide all the help for which you need to approach an advisor. So, next time when you book a fixed deposit online, try to deviate some portion of it to SIP and see how the structure of your savings transformed into a profit-making deal.

Important tips to stay organized while saving for the future

1. Put a rough idea of all the fixed monthly overheads on a piece of paper. The wider there is a gap between income and expenditure, the more there is scope for saving.
2. Adopt a disciplined approach towards savings. Set aside a fixed amount for making savings every month and pledge to continue it. The longer you stick to the savings plan, bigger will be the size of corpus at the end.
3. Try to put cap on the expenditures: Not everything needs to be bought in a single month; it is better to understand the fact. Rome was not built in a Day; so give some time to your dreams too.
4. Make a portfolio of investments: It is advisable to have a good mixture of investments having payback as well as growth feature. If you have some investment options that pay you back at regular intervals, you can meet important objectives without taking bitter and bigger decisions like selling off the house, etc.

Transacting SIP online is much easier than you think!

After buying clothing, home grooming solutions, foods and umpteen other products online, it is time to give Systematic Investment Plans a chance! And believe it or not, the process is nothing more than a walk in the garden. Internet users are reported to be about 40% of the whole global population (www.internetlivestats.com), and the numbers are increasing every year. Given the bouquet of services offered to the buyers of SIP plans online, there is an element of convenience attached with this new concept of making and tracking investments.

Buying online SIP is just as easy as opening an account for online shopping and using it. Only difference lies in the fact that as a first time user, you need to get your KYC (Know Your Customer) verified. So, if you have a valid ID proof, address proof and a bank account with NEFT/RTGS facility, you will never require making umpteen calls to your broker for getting menial tasks done.

This is how you can transact online SIP
Just like any other biller such as electricity or phone service provider, you can add your fund house as biller and pay instalments for making investment in SIP online. Alternatively, you can open an online account with the fund house of your choice. Following this, you are supposed to fill a bank mandate form and send it to the fund house with a cancelled cheque. This is the only offline activity that you require to do to get the process rolling. Once all the documentation processes are completed, the path onwards becomes super easy.

You can enjoy the flexibility associated with SIPs in true sense by going online. A broker may not always be available to you to provide you the needed guidance. Moreover, he may not be dealing with all the funds. But, online fund houses list as high as 200 primary funds to provide umpteen choices to the investor.

Functions available with SIP online

You can do each and every transaction possible through online way of dealing in systematic investment plans. Once your documentation is complete and KYC is verified, you can start buying SIP plan of your choice. Also, there is added flexibility to switch to any fund of your preference at any point of time. Moreover, you can withdraw funds simply by clicking the redeem button. So, online is the new ‘in’ among SIP investors who are sick and tired of listening to the busy tone of helpline numbers of their brokerage firm.

Safety redefined

Online SIP account is as safe as your bank account. Though you need to practice caution against phishing e-mails and other related stuffs, it does provide you password-protected environment and aegis of security related certificates to ensure that your money remains safe and well-protected.

So, find more about how to apply for systematic investment plans online and go for one. You are surely going to become more active in investing and saving for the future, such is the level of convenience!