The first thing that a person thinks of after receiving his salary is saving a big part of it. The most common way of saving money is by investing it in one of the Investment policy. The most popular investment policies available in the market include Mutual Funds, stock trading, ULIPs, bonds, etc. These investments provide a high return on invested money after a certain amount of time. Recently, individuals have been looking for an investment policy that can give good performances at the lowest risk. One such popular investment type is Mutual Funds. Mutual Funds have been top-rated among young individuals and those who want to invest in a safe policy.
The main reason for the popularity of Mutual Funds is the diversity of investment. When a person invests in Mutual Funds, it creates a Portfolio which includes stocks and shares from multiple companies. The difference is essential in Mutual Funds because the loss in one fund will not affect the entire investment. For those who cannot invest a significant amount in Mutual Funds at one time, they have the option of SIP (Systematic investment plan).
SIP is a way of investing in Mutual Funds, where an individual has to pay a small amount every month to invest in the policy. SIP is excellent for those who cannot spend a significant amount at one time. Investing a small amount monthly will not put a substantial burden on their pockets. A person needs to invest in Mutual Funds through SIP, as it can help you plan the needs of the future. Let’s have a look at some benefits of planning Mutual Funds through SIP
Long – term goals
Planning to invest in Mutual Funds through SIP can help you fulfill your long-term goals. Looking to buy a big house or being prepared for your child’s education, it can make us for anything through SIP in Mutual Funds. You can invest a tiny amount every month for the next couple of years. After a certain amount of time, you will get a bulk amount of your investment with the additional profits. We can use this amount for our future needs.
Planning Mutual Funds through SIP is vital for the future of your kids. One can invest in a mutual fund for their child’s education, marriage, or other significant events in his life. In this way, you do not have to arrange a bulk amount of money when needed for your child. You can start by saving a very less amount every month, that will give you a considerable profit and huge return after a few years. This is very important for any unexpected future expenses for your child’s career and life.
Retirement is an enormous factor for a salaried person. To save money for retirement, a person works very hard and save a lot of money to earn financial freedom after retirement. Mutual fund SIP is one of the best ways to save for your retirement. Since you have to pay a tiny amount of money monthly, you will not feel the burden of keeping a significant amount every month. When you retire, you will also get the right amount of profit and interest rate on your investments.
For tax saving
Individuals make a lot of investment to save their tax. Mutual Funds through SIP are one of the best ways to save tax on your income. The monthly investment for Mutual Funds comes under a direct tax rebate by the government. Investing through SIP is also very beneficial to save any extra tax. Also, the profit and returns earn through these investments are tax-free. This is one of the best investment options ones can get with high profits and tax-free gains.
Investing in policy is one of the best ways to save money. However, everyone can’t keep a bulk amount of money monthly. Therefore, SAP seems to be the best saving option for a salaried individual. Since a person has to invest regularly in a smaller amount, it does not create any extra burden. Also, just by investing a small amount every month, the savings will increase, deducting no part from your daily expenses. Spending just a tiny amount every month will give you more significant savings with profit after a specific time.
Low investment cost
Saving plans or investment plans available in the market require a person to invest a significant amount annually. However, this is not something every individual wants. Most individuals wish to flexible payment options for their investment. Such a payment option is only available through SIP in Mutual Funds. A person can start investing in SIP for only rupees 500 a month which is the least investment amount. Five hundred rupees is the lowest investment cost that a person has to invest in Mutual Funds.
The following points above prove that SIP is one of the best investment types. It is not only light on a person’s pocket but also provides a high return with a tiny investment. Therefore, an individual must plan his future through SIP in Mutual Funds to meet his future needs.
To make sure that a person fulfills all his family needs in the future, a person needs to plan any next event in monetary terms. Education, marriage, retirement, and any other plans should be planned accordingly. This helps a person in understanding the financial requirements he would have in the future. Once a person understands his future needs, he can manage and invest in SIP accordingly. SIP is only available in Mutual Funds, and not in any other investment type. Before planning to invest through SIP, a person should take suggestions from an expert or professional to make sure that investments are just right.