SIP is nothing but Systematic Investment Plan, being the best way to save a large number of funds for financial growth in future. In SIP, you have to invest a particular fixed amount on a particular date chosen by you and this should be done every month. The amount you have to pay monthly may be invested from your bank account with the help of Auto debit or ECS facility. If your city doesn’t have a bank or your bank doesn’t have that facility means, that the checks can be accepted. The checks must have to be post-dated and should contain the name of the fund.
The checks you have given will be deposited by the fund house. The fund house deposits a check every month at the date which is specified by you. There are many kinds of mutual investments that include objectives and time periods. Some of the best schemes in mutual investments that provides best fund for Sip are given below,
Growth Category:
These funds are volatile and it reduces the risk of losing your capital investment. The performance in this type of fund depends on the stock market. This type is used for the appreciation of your money and it delivers high returns over a long period which will be more than five years. This will be best for people who are interested in investing long-term funds.
Balanced Category:
These funds will invest your money in both equity and Debt but it will be less volatile when compared to equity funds. This return delivers will be over a period less than the growth funds which will be more than three years.
Income Category:
This type will make an investment in debt instruments. It will secure your invested money and provide regular returns. People who are looking for safe returns may invest in this type.
Ultra Short Term Category:
This will be safe, provides regular returns and flow of cash. This will be best for the investors who are looking to invest in funds which have periods of less than two years.
The funds will be selected based on the performance in the past, investment as well as return consistency and by comparing with funds of similar category. You have to choose the fund category based on the objective and time period of the investment.
