First of all, it is important to know What is SIP? Systematic Investment Plan (SIP) is considered to be a way of investing in mutual funds. SIP allows an investor for investing a sum of money as per his or her convenience as it may be weekly, monthly, quarterly, half-yearly, or once in a calendar year. The frequency of the investment is chosen by the investor and they also enjoy the independence of initiating or terminating their SIP.
Few Benefits of Investing in SIP-
- The Investment Approach is much disciplined:
The growth of few other investments completely depends on the current market trends. You have to do research, study, and then only you can invest. The risk factor is much higher. But in the case of SIPs, the investments are much more disciplined. The investors do not need to worry when, where and How to Invest in SIP.
- Much simpler, easy to monitor, and convenient:
Investors do not need to invest extra time in these. All you need to do is choose the Best SIP Plan and the payments may be scheduled through post-dated cheque or auto-debit option as well. You can easily monitor your investments through monthly statements of the accounts.
- Enjoys the power of Compounding:
It is always said that a compound interest serves better long term benefits. This is one of the most important advantages of investing in SIP. In simple words, SIP Meaning is that starting with your investment at an early age so that the small amount of your savings can regularly grow to a larger amount, and also the returns can be compounded over so many years.
- Two times higher returns if compared with Recurring or Fixed Deposit
SIP always yields minimum 2X higher returns when compared to that of a Recurring or a Fixed Deposit. One of the best examples of this is the SBI SIP which has always given more than 2X returns than that of an RD.
To ascertain the growth of your investments, it is important to know what SIP Calculator is. In simple words, SIP Calculator may be defined as a tool that can be used to get some idea on the returns of the investments done through SIP. SIP Calculator is also known is SIP Return Calculator. The SIP Calculators are also available in the websites of the leading banks who are presently dealing with SIPs. But it is always preferable to use the SBI SIP Calculator or the HDFC SIP Calculator because of its user-friendly nature and accuracy. Both are available at the respective website pages of SBI and HDFC Banks.
Few Benefits of SIP Calculators-
- It gives you proper assistance for determining the amount you wish to invest.
- It also tells you the estimated maturity amount based on your investment.
Another very important medium of investment is the Exchange Traded Fund or ETF. ETF is a kind of Index Funds that are also listed and traded through exchanges just like stock. An ETF is very much similar to a mutual fund that can be bought or sold in real-time at a price that keeps on changing throughout the day.
Key Points of ETF-
- An ETF is a basket full of securities that are traded on exchanges just like the stocks.
- The price of an ETF keeps on fluctuating throughout the day.
- An Exchange Traded Fund may contain all types of investments specifically commodities, stocks, or bonds.
- Compared to stocks, ETFs have low expense ratios and fewer broker commissions.
Last but not the least; it is always appreciable for the investors to decide whether to go for SIP Investment or ETF. The investors should keep in mind the above-mentioned points before deciding where to invest.
