Just as drops of water make an ocean, small but regular investments can go a long way in building wealth over a period of time
SIP is a method of investing a fixed sum, regularly, in a mutual fund scheme. SIP allows an investor to buy units regularly on a specific date of the month. This will help in building wealth in the long term.
Nippon India SIP may help you achieve just that. It is an investment facility where you deposit as little as Rs. 100/- regularly every month in the Mutual Fund scheme at the then prevailing NAV (Net Asset Value).
NAV of the schemes may go up or down depending upon market condition.
Advantages of SIP
No need to time the markets
Imagine, if you could always pick the right time to buy and sell. However, timing the market is a time-consuming and risky task. Through disciplined and regular investments, you can stop worrying about when and how much to invest. In short, it eliminates the need to actively track the markets.
Rupee cost averaging
Since your investments are spread regularly over a period of time, buying fewer units during rising markets and buying more units during falling markets reduces the average cost per unit of your investments - this concept is known as Rupee Cost Averaging.
For more details
Note: Say you are investing Rs.1000 every month from November 11, 2013 to October 10, 2014. Now check the average purchase cost per unit of your investments. It may be lower than the average NAV of your investment over 12 months.
Average Cost = Total Cash Outflow/Total Number of units = Rs.12000/21.73 = Rs. 552.26
Average Price = Sum of all NAVs at which invested / Number of months of investment = Rs.6,800.03/12 = Rs. 566.67
Average Cost < Average Price
Above calculations are only for illustration purpose and should not be co-related with performance of any scheme.
Past Performance may or may not be sustained in future.
Nippon India SIP (Perpetual) - Freedom from renewal hassle
Now you can go for Nippon India SIP (Perpetual) and free yourself from the hassles of renewal. This is an ideal feature which keeps your SIP ticking until you give us an instruction to stop it. Now sit back and relax while your SIP continues without any interruption. All you have to do is tick the PERPETUAL option in the SIP enrolment form.
Minimum Investment of Rs.100 would be applicable, subject to applicable terms & conditions of SID/KIM.
SIP is a Special Product available only in selected Schemes of Nippon India Mutual Fund. Entry load will be Nil and Exit load as applicable in the respective Scheme at the time of registration will be applicable. The unit holder is free to discontinue from the SIP facility at any point of time by giving necessary instructions.
Frequently Asked Questions:
1. What is a Systematic Investment Plan (SIP)?
A SIP is a facility that lets you invest in mutual funds in a smarter and hassle-free way. In this plan, a fixed amount of money is auto-debited from your savings account at regular intervals, weekly, monthly, or quarterly as chosen by you. As a result, you can regularly invest in debt and equity mutual funds and aim for long term wealth appreciation. It is popular, since it establishes a systematic pattern of savings (say on your salary date) without fail, and helps in building a considerable amount of wealth. Knowing your SIP investment amount is also simple as you can do it online with a mutual fund investment calculator.
use the SIP Calculator to know the monthly SIP amount that needs to be invested for meeting different financial goals.
2. Why Choose a Systematic Investment Plan?
Choose a SIP plan for hassle-free and disciplined savings strategy. The power of compounding may help you get better returns - over a long-term period. Rupee-cost averaging ensures you lose less when the market goes down.
3. How Does a SIP Work?
After you subscribe for a mutual fund scheme through the SIP route, a certain amount of money will be auto-debited from your mentioned savings bank account at a chosen time interval; to be invested in the mutual fund scheme. The Net Asset Value (NAV) of your scheme will determine the units allocated to you at the end of the day. The concept of Rupee cost averaging ensures that you buy more units when the market is down - and fewer units when the market is up; this helps average out the cost per unit. Over time, the money gets compounded, thereby offering you comparatively better returns.
4. When is the Right Time to Invest via a SIP?
There is no concept of good-timing in SIP investments; you can start anytime. The sooner you start investing, the better for your long-term financial goals.
5. Is it Safe to invest in through a SIP?
SIP is an investment method. The risk component depends on the fund you choose and also on market conditions. Compared to a one-time investment, SIP mode helps you reduce the volatility risk through the principle of Rupee cost averaging.
6. What is the Minimum Duration of a SIP Investment?
You can invest in mutual fund schemes through SIP for 15 years, 10 years, or even 6 months. Experts suggest investing for a minimum of 3 to 5 years to help your money grow.
7. Can I Withdraw from my SIP Investment?
You can redeem from your mutual fund investments made through the SIP route subject to the exit load and lock-in period, if applicable, of the mutual fund scheme - in which the investment is made.
8. Can I Extend the Period of My SIP Investment?
Yes, you can extend your period of SIP investment. You simply have to fill a form to request the Mutual fund for an extension and choose the desired duration.
9. What Happens If I Miss a SIP Payment?
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Even if you miss a payment, your account will remain active for three months. There are also options to pause contributions by various schemes if you wish to do so.