Starting a SIP is one of the best investment choices which encourages discipline and consistency in investment but also fosters proper planning. So
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SIP investment is a calculated way to invest a fixed amount at regular intervals which can be minimum of INR 500. Investing early in a mutual fund can help you gain better returns over a period. However, there are a few essential tips before you start your SIP plan. It will assist you through your investment journey.
Select your mutual fund type
To choose your best SIP mutual funds investment, you require to know the diverse types of funds that are appropriate for you. For example
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Here are the different funds-
Asset-based funds:
They are also known as stock funds or equity funds. Here you can invest in stocks and securities. They further branch out into a mid-cap, small-cap, sector funds and index funds.
Debt funds:
Also known as the bond funds where you invest in bonds or other debt securities. Debt funds are further grouped according to their investment duration as money market income and fixed maturity income.
Balanced funds:
They are a mix of both debt funds and equity funds.
Structured-based mutual funds:
Such mutual funds include both open-ended funds and closed-ended funds. In case of open-ended funds
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Know your investment objective
Many investors invest in mutual funds to save tax, or they have some extra cash to invest in the financial markets. But mutual funds can offer more than only saving taxes; it can help you attain your financial goals, irrespective if they are short term or long term. Before investing in SIP mutual fund
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While choosing the best mutual fund to invest, it is vital to study the past performance of the returns of those funds. It would be wise to look over the financial trends for past 5 to 10 years and evaluate within the funds to identify whether they can survive market instability or not.
Select a fund house:
Deciding a fund house is equally significant as choosing a fund. You need to know the mutual fund schemes offered by your fund house before you plan to invest. You can look for different aspects like investment method, number of schemes provided and many more. The decisions made by the fund house can benefit an investor to gain high returns while a wrong choice of the fund house can lead to substantial financial losses.
Other than these suggestions
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Technology is so advanced that you can invest in mutual funds through net banking and mobile banking apps.
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