Everyday Money: 4 Reasons To Invest via SIP SIPs help ride out market volatility and inculcate savings habits

By Entrepreneur India Staff

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


For retail investors, Systematic Investment Plan or SIP is increasingly becoming synonymous with mutual fund investing in India, and rightly so. SIPs help investors to create wealth over time by investing periodically in mutual funds. The frequency of an investment can be weekly, monthly or quarterly.

The nature of SIPs help ride out market volatility and inculcate savings habits. Here are five reasons why you should start an SIP now.

Ease of Investing

With SIPs you can choose your investment amount, the frequency of investments and even the date when you'd like to invest every month. You just have to sign up with the mutual fund house you want to invest in or an online aggregator, select the amount you'd like to invest and the date. Now several platforms allow video KYC (know your customer), which takes less than five minutes to complete.

You can also pause your SIP for up to six months or even cancel it when required by just intimating the fund. If you are investing through an online platform, you can also skip SIPs in between as and when required.

Invest Small Amounts

"I don't have money to invest" - this is the most common reason retail investors give for not investing. With SIPs, you don't need a huge amount to start investing. SIPs lets you invest as little as INR 500 per month. This is almost how much a movie ticket in a multiplex costs.

Set your SIP debit date at the start of the month so that you can invest before you start spending. In a small salary, start with a small SIP so that it easy on your pocket and increase it over time with every appraisal that you get.

Inculcates Investing Discipline

Through an SIP, you invest regularly irrespective of the market movements. Such discipline is crucial to investment success. As your SIP is automated, your investments are placed on time and not interfered with by your greed or fear arising due to market movements.

Average Out Costs

Equity investments are subjected to market volatility. As opposed to lump sum investment, SIPs help to ride out this volatility by investing regularly. When the markets are up, you buy less units at a high price and more units at a cheaper price when the market tanks. This is called rupee cost averaging and it minimises the effect of market fluctuations on your investments.

Related Read: 3 Things To Know Before You Start An SIP

Wavy Line

Related Topics

Business Plans

How to Change Careers: A Step-by-Step Guide

Want to make a career change without compromising your finances or future? Check out this step-by-step guide on how to change careers to learn more.

News and Trends

KL Rahul Invests In Sequoia-Backed Hyugalife.com

KL Rahul, who is currently recovering from a sports injury has joined hands with HyugaLife.com to inspire every Indian to be their healthiest and best self with its all-encompassing platform


6 Ways Successful Entrepreneurs Manage Their Time and Achieve a Work-Life Balance

Maintaining a healthy work-life balance as an entrepreneur is not a luxury; it's a necessity.


3 Automated Lead Generation Strategies To Implement In Your Sales Process

Outbound sales is crucial for all growing companies. Here are three proven strategies to ensure our calendars are always full.

News and Trends

B2B Fintech platform BharatNXT Raises $1.2 Million Seed Fund

The funds will be utilized to invest in product development and expanding the team size by 4 times and enhancing the scalability of the core technology to accommodate ten times the current growth


5 Actions Government Must Take to Promote Sports Entrepreneurship in India

In order to attract young and visionary entrepreneurs to the sports sector, the Indian government must increase funding and offer tax holidays for sports-based firms