What is an SIP? How to start an SIP?

SIP is a way of investing in the market in small installments instead of a big amount at once.

SIP, also known as Systematic Investment Plan, is a way of investing a small amount on a fixed date every month, week, or even a day.

Example:

Sanjay ji has a Kirana shop. He doesn't understand the stock market but he wants to invest and earn from it.

- Sanjay ji can afford to invest Rs. 500/month.

- He goes to an expert. He opens his account in the stock market and starts investing his Rs. 500 on the 5th of every month.

Where would his money be invested shall be taken care by professionals in the form of mutual funds. Sanjay Ji can now focus on his Kirana shop while his money works for him in the market.

What is a Mutual Fund?

A Mutual Fund is like a group of investments from many small and big investors like Sanjay ji. All this money is managed by professionals who are qualified and have sufficient experience in the stock market.

This is as simple as that!

What are the benefits of SIP?

1. Discipline: The money gets automatically debited from your bank account on a decided date every month. This helps you stay disciplined and consistent in your investing journey.

   
   

2. Compounding: Even a small amount invested consistently over a period of time helps in growing the money exponentially.

   
   

3. Averaging: Market doesn't go up in a straight line. There are prolonged periods of dip or consolidation in the market every now and then before it makes a new high. SIP helps in averaging out the volatility in the market by investing the money in every dip, along with the highs.

We at vestoks recommend everyone to start their investment journey as soon as possible so that they can benefit the most from compounding. If you are in your twenties and haven't started your investing journey yet. Consider opening a mutual fund account as soon as possible and start as small as Rs. 500/- per month. But start.

If you want to be as happy as Sanjay Ji, Open a mutual fund account today and get free expert advice and guidance from us. Click here to open an account.

If you haver any doubts. Feel free to drop your questions in the comments below.