4 Important But Less Known Things About SIPs FundooMoney

4 Important But Less Known Things About SIPs

Author: Kundan Kishore

Systematic investment plans (SIPs) from mutual funds allow investors to regularly invest in mutual funds. However, in India, SIPs are typically associated with high growth investments in equities through equity funds. In reality, there is much more to SIPs. Here are four such things that illustrate how helpful SIPs can be.

Available in mutual funds other than equity funds You can have SIPs in debt funds and liquid funds.

Difference in SIP and lump sum returns The difference in returns is because SIP investments get different time periods to grow. In a lump sum amount, the whole investment amount gets the full period to grow.

SIP in the name of your newborn child You can get started in your journey to secure the future of your newborn child by starting an SIP.

ELSS lock-in till last investment completes 3 years In equity inked savings schemes (ELSS) which invests in equities and provides annual tax deduction upto Rs 1.5 lakh under Section 80C, the lock in period for each instalment starts from its date of investment and lasts three years.

Clearly, SIPs are not only about investing in high growth investment but regular investments in any category of mutual funds. By being aware of the possibilities that SIPs present, an investor can make the best use of them.