What is SIP in mutual fund?

Mutual funds help people earn a lot of money. In mutual funds, the fund manager takes the responsibility of trading shares. Fund managers first evaluate the market status after which he makes the investment. So ultimately the investors end up getting higher returns. In Mutual funds the SIP mutual fund is famous. Since everybody cannot take up the burden to invest in funds, they brought in the idea of SIP.

SIP is a Systematic Investment Plan. It is something similar to making investment in a recurring deposit. In both the plans, the payment is made monthly. This SIP in Mutual plan enables the middle class to invest in the funds. There are various benefits from SIP plans. Few of the benefits are rupee cost average, higher returns and low obtaining cost. Since the money is being used to invest over a long period of time, averaging is a must. At low NAV more number of units are bought and at high NAV lesser number of units are bought. Obtaining the cost of shares is low due to this. Furthermore, the value of the investment does not differ. It increases fast. There are also a few risks when it comes to investing in mutual funds. The type of shares you select decide the profit and loss ratio. There are various SIP plans in mutual funds. Below we list the various plans:

  • Magnum Taxgain
  • Magnum Equity
  • Chota SIP plan

Each plan has various benefits and features. Magnum Taxgain provides exemption from tax to customers. Tax exemption is provided below the 1 lakh rupee amount. In Magnum equity the investment is done in blue chip stocks. This is completely risk free. Customers get their minimum regular returns but don’t get higher returns. However, Chota plan is present for rural people. Monthly investments are very low in this type of plan. This factor allows a lot of people to invest in this type of SIP mutual fund.

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