Mutual fund is an investment medium to collect money from investors who share a common investment objective. What fund houses do is that they collect money from investors sharing a common investment objective and invest this fund’s pool across asset classes and money market instruments. Depending on the nature of the scheme and its investment objective, a mutual fund scheme can invest in company shares, equities, government securities, company fixed deposits, debentures, treasury bills, gold, immovable assets, etc. The performance of each mutual fund scheme depends on its underlying assets and the performance of the various sectors and industries in which it invests.

Mutual fund investors have the option to either invest a lump sum lump sum or can start monthly as well.
sip in mutual funds. Lump sum investors usually expose the entire investment amount to the volatile nature of the market. However, the introduction of Systematic Investment Plans or SIPs has made it possible for almost everyone to invest in mutual funds and give themselves an opportunity to earn capital growth over a long period of time.


Here are the top 10 reasons to start SIP in Mutual Funds –

1. A systematic investment plan is an easy and hassle free way to invest in mutual funds. Investors can invest small fixed amount at regular intervals (usually every month) instead of making lump sum investments.
2. To start investing in mutual funds through SIP, investors should follow KYC. If you are a KYC compliant individual, you can start SIP in Mutual Funds from the comfort of your home or office. All you need is a laptop or smartphone with a good internet connection and you can start SIP in mutual funds by visiting the website of the fund house by visiting the SIP page of the mutual fund scheme.
3. Once you have completed all the pre-investment formalities with the fund house and your bank and have decided how much you want to invest regularly, a pre-investment deposit is made from the investor’s savings account on a specified date every month. The prescribed amount is debited and electronically transferred to the fund. One does not need to personally visit the fund house to invest his/her monthly SIP amount. Thanks to the option of auto debit, you automatically save a fixed amount every month.
4. Investors can also refer to the SIP calculator, which is a free online tool, where they can get a rough estimate on the capital appreciation they will receive at the end of their SIP investment journey. For example, if you input how many years you want to invest a certain amount every month, the SIP calculator will give you an approximate figure, thus allowing investors to accumulate money through systematic investments through SIPs. And will give a fair idea about money.
5. If you are new to mutual fund investing and do not have the habit of investing and saving, then starting a SIP in mutual funds can inculcate the discipline of saving and regular investing.
6. If you have long term financial goals like buying your dream home or if you are planning to go on a world tour with your spouse after retirement or if you want to build a corpus for your child’s education and their tuition , then one can start SIP. Help you gradually build up an admirable corpus.
7. Individuals who have a long-term investment horizon and invest in mutual funds through SIPs stand a chance to benefit from the power of compounding and rupee cost averaging.
8. The power of compounding that comes from compound interest is another unique tool that can convert your small SIP investment amount into a decent corpus. When the amount invested by you a mutual fund scheme Earns interest, this interest starts earning interest of its own. This is referred to as the power of compounding and turns into a never-ending cycle of earning interest until you decide to redeem your mutual fund units.
9. It seems that rupee cost averaging also works in favor of SIP investors with longer investment horizon. The monthly SIP amount remains constant, but the NAV of the scheme may fluctuate depending on the volatile equity markets. Therefore, when the NAV of the equity mutual fund you have invested in is high, fewer units are allotted. Similarly, when the NAV of that scheme is less, more units are allotted. This adjustment of allocation of units is known as rupee cost averaging and is known to reduce investment risk. Also, even when the markets are underperforming, investors benefit as they get more units.
10. Investors are free to stop their existing SIPs if the mutual fund scheme is underperforming. Similarly, they can also increase the monthly SIP amount depending on their investment objective.

The Systematic Investment plan is flexible, thus providing a lot of benefits for the mutual fund investors. However, investors are expected to consult a financial advisor before investing.