SIP Investment: Investment in SIP has increased rapidly in the last few years. Investment in mutual funds is made through Systematic Investment Plans (SIPs). Since it is market linked, there is no guaranteed return in it, but most experts believe that the average return in SIP is 12 per cent, which is much higher than the return on assured return investment schemes.
Due to the benefit of compounding, you can make a good amount of money through SIP in the long run.
This is the reason why SIP has become increasingly popular in the last few years.
If you are thinking of investing in mutual funds through SIP, then do not take the decision just by looking at their returns in a last few years.
Know some important things before investing, so that you can choose the best SIP for yourself and never regret your decision in the future.
Ask yourself why you want to start SIP
Before choosing the best SIP, understand your objective well.
Ask yourself why you want to start SIP – for retirement fund, for down payment on a house, to travel or for any other reason.
If you know about the goal, then you will be able to easily choose the best SIP for yourself.
There are many types of SIP mutual funds
There are many types of SIP mutual funds like equity funds, debt funds, multi-cap funds and liquid funds, etc.
You can choose among these mutual funds according to your goal.
For example, if you want to save money for traveling and are starting a short-term SIP, then you can invest in liquid funds or debt funds.
Equity mutual funds are considered better for long-term investment.
Comparison of history, expense ratio, fund manager history
List the top contenders for the best mutual fund and compare them. If you know your goal, you will easily be able to assess the mutual funds fulfilling your needs.
Compare their return history, expense ratio, fund manager history, etc. This will help you a lot in choosing the best SIP as per your requirement.
Consult a financial expert
If you do not have the slightest idea about investing in mutual funds, or even after following all the instructions given above, you are not able to take any decision, then you should talk to a financial expert.
They will help you choose the best SIP as per your need. If you choose the right SIP for you, you will get better returns and will never regret.
Note- This article based on information given on the ICICI Bank website.