New Delhi4 days ago
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If you are planning to invest in mutual funds but cannot deposit a large amount at once, then ‘Micro SIP’ (Systematic Investment Plan) may be a better option for you.
Through this, you can create a fund of lakhs of rupees with a minimum investment of Rs 100 per month. Most fund houses in the country offer plans to start investing with a minimum of Rs 1000. But some fund houses allow investment even from Rs 100.
What is Micro SIP?
Micro SIP is a way to invest in mutual funds. In this, investors can start with a minimum monthly contribution of Rs 100. Fund houses launch such investment options to attract small investors.
To make investing in mutual funds more affordable and easier, fund houses are planning to reduce the amount to be deposited every month to Rs 50. This method of investment reduces the average monthly investment of the investor.
Benefits of Mutual Fund Micro SIP:
- Lower SIP amount: The most special thing about Micro SIP is that the investment amount is low, which starts from just Rs 100. This can be a better option for low budget investors.
- Flexible Investment: Micro SIPs are flexible. Investors can adjust it according to their financial needs or capacity. This makes the investment process seamless and easy.
- Simplified KYC: KYC is not required for Micro SIP as the deposit amount in any one financial year is not more than Rs 50,000. This makes it easier for people to start investing in mutual funds.
Is long term SIP investment profitable?
There are many types of mutual funds such as equity, debt and hybrid funds etc. It is often seen that investing in equity funds proves to be more profitable in the long run. The reason for this is that by doing SIP in equity funds for a long time, the risk of fluctuations in the stock market is reduced.
The low and high levels of the stock market generate an average return and also the benefit of compounding is available. But it is not that there are no mutual funds for the short term. Investors can also do SIP in debt or hybrid funds keeping in mind their needs and investment period.
Is it right to invest money in daily SIP or monthly?
There is an option to invest in mutual funds through SIP on daily, monthly or quarterly basis. Research over the last few years has shown that in the long run it does not matter how many times you do SIP in a month if the total of SIPs done for the entire month is the same.