Best Mutual Fund Investment
Mutual funds offer diversification or access to a wider variety of investments than an individual investor could afford to buy. There are economies of scale in investing with a group. Monthly contributions help the investor’s assets grow. Funds are more liquid because they tend to be less volatile.
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What is SIP ?
SIP is the short form of systematic investment plan. While mutual fund is an investment product or instrument, SIP is a method of investing in mutual funds. As the name suggests, through a mutual fund SIP you can invest systematically over a period of time and create a corpus to meet your different financial goals. As you can see, SIP is not different from Mutual Funds, it is a part of it.
SIP brings discipline in investing by making sure the investor deposits small but regular amounts in a chosen scheme, over time. One can choose the frequency of investment here such as daily, weekly, monthly, fortnightly or yearly, and follow that diligently for building a corpus. On choosing a frequency and date, the money automatically gets debited from the bank account of the investor.
In summary, SIP or systematic investment plan is simple, user friendly, hassle free and a convenient way of beginning your journey in Mutual Fund investments.
SIP vs mutual fund – Other than SIP, you can also invest lump sum amounts in mutual funds. For example – you have Rs 1 Lakh in hand and you want to invest in mutual funds. You can invest the same in one go without any commitment to invest again in that fund. This is also known as one-time investment in mutual funds.
In summary, those investor who want to know what is the difference between sip and mutual fund or what is the difference between mutual fund and SIP should note that the both cannot be compared simply because, mutual fund is an investment product, while SIP is a way of investing in it.
An Investor Education and Awareness Initiative by Mirae Asset Mutual Fund.
For information on one-time KYC (Know Your Customer) process, Registered Mutual Funds and procedure to lodge.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully