Are you familiar with this term SIP? It is Systematic Investment Plan. Now suppose you want to deal with the mutual funds which you think much more protected and profitable, you must highlight the area of SIP as it has the close proximity with the mutual funds. It is the most sophisticated and comfortable scheme to deposit money in a number of installments instead of one time payment option.
It is less complicated process and you can enjoy the full right by investing the small amount of money in a number of times instead of making one time down payment. Suppose you can deposit into the mutual fund account total 5000 thousand rupees in 10 periodic installments in a month.
In this case you are exempted from bearing the financial burden by paying 5000 rupees in cash at one time. It is little bit financial relaxation for you. If you have fixed income every month, you can release only 500 rupees in 10 installments every month. It will be profitable to your and you will not face any financial crunch or you will not feel it urgent to borrow money from other sources and make up the gap.
There are several factors which you need to mug up while taking the SIP option to run the Mutual Funds. You must show your utmost tolerance in checking the terms and conditions of the paper/contract which is made between you and the under-writer or bank.
- You will have to show your expertise in maintaining the regularity in making the periodic investments to complete the total premiums. There should not be any irregularity or anomaly in the payment of premiums. Frankly speaking, you should be deadline conscious and punctual to make the down payments.
- Time management is very important issue and you must practice at an early stage. According to the financial advisers, those who are interested to run the SIP in MF plan must start very early in their life.
- You will have the maximum time to increase the principal amount which will get back to you in the form of handsome amount plus the surplus interest. Suppose X person started making investment 20000 rupees per year under the SIP scheme at the age of 25 and Y guy took initiative investing 20000 annually when his age was 30.
- Now do the comparison study to find out their corpus ratio. X will get the sound cash back offer in comparison to the Y person. Therefore be careful and chalk out programs to start at an earlier date in life.
There are other positive aspects of this plan. The transaction process is very simple. Just collect the enrollment form for filling up. You will have to submit the form along with the cheques. The concerned authority of the MF will follow the next steps to deposit the cheques in the account. You should not be anxious of any surplus financial charges on SIP plan. It is totally hassle free service and you will be able to take care of the MF investments in systematic way.