Everybody cannot invest in shares and stocks. A Lot of knowledge is required to invest successfully in shares. This problem was solved by mutual funds. SBI Mutual fund is one of the best performing company as they generate high returns. Since high investment is required for investing in the schemes, many investors are not able to invest in it. SBI mutual fund introduced the SIP plan for solving this problem. SIP is Systematic Investment Plan. This plan has numerous advantages. This plan allows investor to invest monthly. This is similar to investing in a recurring deposit. The various benefits of SIP are listed below.
- Rupee Cost Averaging
- Lower per unit acquiring cost
- Monthly Payments
- High returns
- Investment Value
In this plan, money is invested for a long time period. So more number of units are bought at a low cost and less number of units are bought at high cost. Due to this, average cost of share becomes less after a time period. This is called lower per unit acquiring cost. Due to averaging and low acquiring cost, investment value increases. SBI have introduced different SIP plans. Some of them are Magnum Equity, Magnum Taxgain and Chota SIP plan.
Each plan was introduced to satisfy the needs of different people. Each plan has its own rules and advantages. Magnum Taxgain allows tax exemption for investors. Investment below 1 lakh rupee has tax exemption in magnum taxgain scheme. Chota plan has low monthly investment. Monthly investment will be in range of 100 to 500 rupees.
Next Step: How to Invest?
You can get more details of the SIP plans. The details are available in the leading websites.