What is Systematic Investment Planning
We all have various financial obligations. Some of them like daily needs, school fees, etc. involve the major outgo of your cash. Others like trip for your family or buying a fancy gizmo entails a onetime payments for which money can be relatively easily collected. But for long term goals like retirement or purchasing a home require you to save and invest for many years. Yet irrespective of the amount involved and the time horizon, planning and investing money systematically and regularly enables you to sail through these obligations. A SIP could prove to be a simple and effective solution toward achieving these goals.
A SIP is a method of investing in mutual funds, by investing a fixed sum at a regular frequency, to buy units of a mutual fund schemes. It is quite similar to a recurring deposit of a bank or post office. For the convenience, an investor could start a SIP with as low as Rs 500; however, this amount may differ from one fund house to other.