Wondering what a smart SIP fund is? Well, you must be aware of the recurring deposit scheme offered by the banks. In a recurring deposit scheme, the commuter deposits a fixed sum every month to their rd account for a given tenure. On the date of maturity, the bank then pays back the amount accumulated along with interest, at a particular rate, on the amount deposited. That is how the commuter benefits from the recurring deposit scheme of the bank.
If you are planning to invest in mutual funds in India then you must consider the smart and systematic investment plans available in the market. SIP in India or the systematic investment plan also operates on a similar principle. A certain amount is debited from the investor’s account at regular intervals like weekly, monthly or quarterly. The amount is then invested in various mutual funds operating in the market like equity funds, debt funds, hybrid funds or international fof. These could turn out to be fruitful for the investor soon or in the long-term. There is another scheme of the mutual fund market known as the smart SIP. If you opt for investing in a smart SIP fund then your money would only be invested in equity mutual funds, the values of which are most likely to double shortly.
Smart SIPs are the best option to go for if you want to combat the risks posed by the mutual fund market. It brings substantial cash flow to the investor which in turn results to be profitable. Since smart SIP is associated with investments made in equity mutual funds, you need to be patient for earning profit from your investment. Smart SIPs keep track of the market analysis and invest your capital in shares that are soon to get double in their values. Furthermore, SIPs are considered to be flexible and smart systematic plans where you could easily opt for a change in the investment scheme and accordingly increase or cut down on your capital.
There are quite a few benefits of adapting to a smart systematic investment plan. Let us take a brief insight into the top three advantages of buying a smart SIP.
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- Smart SIP fund comes with flexible plans: Flexibility offered by the SIP in equity mutual funds is much appreciated by the investors. You get the upper hand by being able to invest and withdraw from the market at your convenience. If you are running short on your budget then you could opt for a break from the SIP. Thus, this flexibility allows the smart SIP to start and stop whenever required, that too at free of cost and charges. That makes it a much-preferred investment scheme than the debt funds, hybrid funds, international fof, etc.
- Smart SIP enables you to start investment with a minimum amount: Another vital factor that makes the SIP in India stand out from other investment schemes is its minimum investment amount. You can start with a sum as low as rs. 100 and sometimes, rs. 500. Thus, the smart SIP fund does not pressurise you to invest a lump sum at the beginning itself. You could start with a minimum and then further elevate your investment horizon to reap the maximum cash flow in the form of returns.
- SIP in India can be bought in multiple numbers: With a smart SIP, you can opt for investing in a series of mutual funds. However, you need to be cautious of the funds you are investing in. That implies that the funds must invest in shares of a company that is liable to double its value in the long run.
