5 Common SIP Myths
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Systematic Investment Plan is a route through which investors can invest predetermined sum of money in mutual funds in regular intervals. He can invest small amount every month or week to accumulate huge amount in the course of time.. But people believe in lot of false information that is circulated or discussed among peers due to which it SIP seems very skeptical to invest in. So here are some of common myths that you should completely avoid believing in.
Many people have this misconception that you should invest in SIP with small amounts such as Rs.500 or Rs.1000. But this is not true, in SIP you can also start investing with big amounts. Through SIP mode, you can invest up to Rs. 1 Lakh and more.
SIP is one of the wisest ways to create the wealth for your future. If you are planning to invest through SIP in an equity fund for a longer duration, then you mayreceive a higher rate of returns. Many financial advisors advice their clients to invest in long term SIP tofulfil the long term financial goals. .
Unlike other investment options such as fixed deposits, if you want to stop your SIP before the duration, you will not be charged. Like when you discontinue your FD before maturity you will be charged penalty amount of 1% interest rate. But in SIP you don’t need to worry. You just have to stop or discontinue the SIP in your mutual fund investment portal or call your fiancial advisor to discontinue or stop your SIP.
You can change the tenure and amount of your SIP anytime between duration. SIPs are completely flexible. If you invest Rs.6,000 this month through SIP and you want to increase it to Rs. 8,000 the next month you can do it without any hesitation. There will be no charge or penalty to change the tenure or amount of your SIP.
No, SIP in mutual fund does not guarantee returns. You invest fund every month or weekly. These are market-linked instruments so the investment returns are not guaranteed.
So, whenever you find anyone talking about any of the above myths, you can correct them and showoff your financial knowledge.
Here’s why you should invest in mutual funds through SIP
