Learn: SIP
A Systematic Investment Plan (SIP) is a facility offered by mutual funds that lets an investor invest a fixed amount at pre-defined intervals in a chosen mutual fund scheme. SIP returns are not fixed or guaranteed and depend on market performance.
This page is for education only. Money Grow is not registered with SEBI and does not recommend, sell or manage any SIP or mutual fund.
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No. A SIP is a way of investing in a mutual fund, not a product with a fixed interest rate. Returns vary with the scheme and the market and are not guaranteed. Past performance is not an indicator of future returns.
But they do not eliminate risk completely. In a falling market, your mutual fund investments are bound to go down. However, investments done through SIP compared to lump sum investments will reduce your losses. Similarly, SIPs don’t guarantee returns over the long term.
- SIP returns are lower in consistently rising markets.
- Limited options of SIP dates.
- Only Pre-defined Fixed Amount can be Invested by SIP.
- Stopping intermediate payment in SIP.
- Delay between actual application & start/stop of SIP.
- SIP does not suit people with unpredictable cash flows.
Many of them believe that investing through SIPs guarantee returns. It is not true. SIP is an investment option that allows you to invest in mutual funds, typically in equity mutual funds, periodically. It helps you to invest in a disciplined manner without bothering about the prevailing market conditions.
Yes, there is a possibility of losing money in a mutual fund. The basics of a mutual fund is that you have a mutual fund manager: he or she is in charge of the fund; he selects the stocks, he may trade the fund; he may select groups of stocks to invest in, and that makes up the mutual fund.