A Systematic
Investment Plan (SIP) is a method of investing a fixed amount regularly
(usually monthly) in a mutual fund. Think of it like a recurring deposit, but
instead of a bank, your money goes into a mutual fund that invests in stocks,
bonds, or a mix of both. It’s a disciplined way to build wealth over time without
needing to time the market.
Here’s
how it works:
- You choose a mutual fund and
decide how much to invest (e.g., ₹1,000/month).
- This amount is automatically
deducted from your bank account on a fixed date.
- The money buys units
of the mutual fund at the prevailing Net Asset Value (NAV), which is the
price per unit of the fund.
- Over time, your investment
grows through compounding (earning returns on your returns) and
market growth.
For
example, if you invest ₹5,000 monthly in a mutual fund with an expected 12%
annual return, after 20 years, you could potentially grow your investment to
over ₹1 crore, even though you only invested ₹12 lakh. This is the power of
compounding, which we’ll explore later.
Why Should You Invest in SIPs?
SIPs are
popular in India because they’re affordable, flexible, and beginner-friendly.
Here’s why you should consider them:
1. Affordable: You can start with as little as
₹100/month (e.g., HDFC Mid-Cap Opportunities Fund allows SIPs from ₹100). No
need for a big lump sum.
2. Disciplined Investing: SIPs encourage regular
investing, reducing the temptation to spend your savings.
3. Rupee Cost Averaging: When markets are down, your
fixed SIP amount buys more units; when markets are up, you buy fewer. This
averages out your cost, reducing the risk of investing a large amount at the
wrong time.
4. Power of Compounding: The longer you stay invested,
the more your money grows. For instance, ₹10,000/month at 12% for 15 years
could grow to ~₹50 lakh.
5. Flexibility: You can increase, decrease, pause,
or stop your SIP anytime without penalties.
6. Diversification: Mutual funds invest in a basket
of stocks or bonds, spreading your risk compared to buying individual stocks.
Real-World
Example: Imagine
you started a ₹5,000/month SIP in the SBI Bluechip Fund in 2005. By 2025,
assuming a 12% CAGR (Compound Annual Growth Rate), your investment of ₹12 lakh
(₹5,000 x 12 x 20) could be worth over ₹75 lakh. This shows how patience pays
off with SIPs.
How Does an SIP Work?
Let’s
break it down step-by-step:
1. Choose a Mutual Fund: Pick a fund based on your goals
(e.g., retirement, buying a house) and risk appetite. Funds are categorized as
equity (high risk, high return), debt (low risk, stable returns), or hybrid (a
mix).
2. Set SIP Amount and Date: Decide how much you can invest
monthly (e.g., ₹1,000) and choose a date for auto-debit (e.g., 5th of every
month).
3. Open a Demat Account: You need a demat account to
invest in mutual funds online. Platforms like Zerodha, Groww, or Paytm Money
make this easy.
4. Link Your Bank Account: Enable auto-debit (via UPI or
net banking) to ensure your SIP runs smoothly.
5. Invest and Track: Your money buys mutual fund
units monthly. You can track your investment’s growth via the app or platform.
Example
Calculation (using
an SIP calculator):
- Monthly SIP: ₹5,000
- Tenure: 10 years
- Expected Return: 12% CAGR
- Total Invested: ₹5,000 x 12 x 10 = ₹6 lakh
- Future Value: ~₹11.61 lakh (calculated
using the SIP formula: FV = P x [(1 + r)^n - 1] / r, where P is monthly
investment, r is monthly return rate, and n is number of months).
Types of SIPs
SIPs
aren’t one-size-fits-all. Here are the main types:
- Regular SIP: Fixed amount invested
monthly (e.g., ₹2,000/month).
- Step-Up SIP: Increase your SIP amount
periodically (e.g., ₹5,000/month, increasing by 10% annually). Ideal if
your income grows.
- Flexi SIP: Adjust your SIP amount
based on your cash flow (e.g., ₹10,000 in good months, ₹2,000 in lean
months).
- Perpetual SIP: Runs indefinitely until
you stop it, great for long-term goals.
Expert
Tip: If
you’re young and your salary is likely to increase, opt for a step-up SIP. For
example, starting with ₹5,000/month and increasing by ₹500 annually can
significantly boost your corpus over 15 years.
How to Start an SIP?
Starting
an SIP is straightforward. Follow these steps:
1. Complete KYC: Submit your PAN, Aadhaar, and
bank details to become KYC-compliant. Most platforms do this online.
2. Choose a Platform: Use apps like Groww, Zerodha
Coin, Paytm Money, or ET Money. These are user-friendly and SEBI-regulated.
3. Select a Fund: Research funds based on past
performance, fund manager track record, and your goals. Check platforms like
Moneycontrol or Value Research for ratings.
4. Set Up SIP: Log into your chosen app,
select the fund, enter the SIP amount, and choose a date. Link your bank
account for auto-debit.
5. Monitor Regularly: Check your investment’s
performance quarterly, but avoid reacting to short-term market dips.
Recommended
Platforms (as of
April 2025):
- Groww: Simple interface, no
commission on direct plans.
- Zerodha Coin: Low-cost, trusted by
millions.
- Paytm Money: Offers SIPs from ₹100,
great for beginners.
- ET Money: Provides portfolio
analysis and tax-saving insights.
Common Questions About SIPs Answered
The
transcript highlighted several user queries, and I’ve added expert insights to
address them comprehensively.
1. Is There a Minimum Balance Required for Autopay
of SIP?
No, there’s
no specific minimum balance required in your bank account for SIP autopay, but
you must have enough funds to cover the SIP amount on the chosen date. For
example, if your SIP is ₹2,000 on the 5th, ensure your account has at least
₹2,000 that day. If the autopay fails due to insufficient funds, some platforms
may retry the debit, but repeated failures could pause your SIP. To avoid this,
maintain a small buffer (e.g., ₹500 extra).
Expert
Tip: Set
your SIP date a few days after your salary credits to ensure sufficient funds.
Use UPI autopay for seamless transactions.
Source: Groww
2. Tax Applicability on Mutual Fund SIPs
Tax on
SIPs depends on the type of mutual fund and holding period. Here’s a breakdown
(as of April 2025):
- Equity Funds (65%+ invested in stocks):
- Short-Term Capital Gains
(STCG):
If sold within 1 year, gains are taxed at 20%.
- Long-Term Capital Gains
(LTCG):
If held over 1 year, gains up to ₹1.25 lakh/year are tax-free. Gains
above this are taxed at 12.5%.
- Example: You invest ₹5,000/month
in an equity fund. After 2 years, your ₹1.2 lakh investment grows to ₹1.8
lakh. Your ₹60,000 gain is LTCG. The first ₹1.25 lakh of total LTCG
(across all investments) is tax-free; excess is taxed at 12.5%.
- Debt Funds (65%+ invested in bonds):
- Gains are taxed at your
income tax slab rate, regardless of holding period.
- Example: If you’re in the 30% tax
bracket and earn ₹50,000 profit, you pay ₹15,000 tax.
- Hybrid Funds: Tax depends on whether the
fund is equity-oriented or debt-oriented.
- Dividends: If you opt for a dividend
plan, dividends are added to your income and taxed at your slab rate.
Additional
Notes:
- Each SIP installment is
treated as a separate investment for tax purposes. For example, if you
sell after 2 years, only units bought 1+ year ago qualify for LTCG.
- No tax is deducted at source
(TDS) on mutual fund redemptions, but you must declare gains in your ITR.
Expert
Tip: Choose direct
plans (no distributor commission) and growth plans (no dividends) to
minimize tax liability and maximize returns. Use an ELSS fund for tax-saving
SIPs under Section 80C (up to ₹1.5 lakh deduction).
Source: Income Tax India, Value Research
3. I Want to SIP in Mutual Funds and Leave It for
15 Years. Which Are the Best Funds?
If you’re
looking for a “set it and forget it” approach for 15 years, focus on funds with
consistent performance, low expense ratios, and strong fund management. Since
you don’t want to overthink, I recommend diversified equity funds (large-cap, multi-cap,
or flexi-cap) for stability and growth. Here are three solid picks (as of April
2025, based on historical performance and expert ratings):
1. Parag Parikh Flexi Cap Fund:
o Why: Invests across large, mid, and
small caps, including global stocks (e.g., Google, Amazon). Known for steady
returns and low volatility.
o 5-Year CAGR: ~20% (as of March 2025).
o Minimum SIP: ₹1,000.
o Risk: Moderate.
2. SBI Bluechip Fund:
o Why: Focuses on large-cap stocks
(e.g., HDFC Bank, Reliance). Ideal for conservative investors seeking
stability.
o 5-Year CAGR: ~15%.
o Minimum SIP: ₹500.
o Risk: Low to moderate.
3. Mirae Asset Large & Midcap
Fund:
o Why: Balances large and mid-cap
stocks for growth and stability. Strong track record.
o 5-Year CAGR: ~18%.
o Minimum SIP: ₹500.
o Risk: Moderate to high.
How to
Choose:
- Check Past Performance: Look at 5-10 year returns
on Moneycontrol or Value Research.
- Fund Manager Track Record: Ensure the fund has a
stable, experienced manager.
- Expense Ratio: Lower is better (e.g.,
<1% for direct plans).
- Benchmark Comparison: Ensure the fund
consistently beats its benchmark (e.g., Nifty 500).
Expert
Opinion: For a
15-year horizon, allocate 60% to flexi/multi-cap funds (e.g., Parag Parikh) and
40% to large-cap funds (e.g., SBI Bluechip) for balanced growth. Avoid
small-cap funds unless you’re comfortable with high volatility. Review your
portfolio every 2-3 years, but don’t panic during market dips—15 years is long
enough to ride out corrections.
Disclaimer: Past performance isn’t a
guarantee of future results. Consult a SEBI-registered advisor before
investing.
Source: Moneycontrol,
Value Research
4. Which Platform to Use to Invest?
Choosing
the right platform is crucial for a hassle-free SIP experience. Here are my top
picks (as of April 2025):
- Groww:
- Pros: Intuitive app, zero
commission on direct plans, SIPs from ₹100.
- Cons: Limited advanced tools
for pro investors.
- Best For: Beginners.
- Zerodha Coin:
- Pros: Trusted brand, low-cost,
seamless integration with Zerodha Kite.
- Cons: No advisory services.
- Best For: Those with a Zerodha
demat account.
- Paytm Money:
- Pros: User-friendly, SIPs from
₹100, goal-based investing features.
- Cons: Slightly higher fees for
regular plans.
- Best For: Paytm users.
- ET Money:
- Pros: Portfolio tracking,
tax-saving insights, direct plans.
- Cons: App can feel cluttered.
- Best For: Investors seeking
analytics.
How to
Decide:
- Ease of Use: Pick an app with a clean
interface (e.g., Groww).
- Cost: Opt for platforms offering
direct plans to save on commissions.
- Features: Look for SIP calculators,
portfolio trackers, and KYC support.
- Security: Ensure the platform is
SEBI-registered.
Expert
Tip: Start
with Groww or Paytm Money if you’re new. Once comfortable, explore Zerodha Coin
for cost savings. Always enable two-factor authentication for security.
Common Mistakes to Avoid with SIPs
The
transcript highlighted common errors investors make. Here’s how to avoid them:
1. Chasing High Returns: Don’t pick funds based only on
recent performance (e.g., “This small-cap gave 36% last year!”). Small-caps can
crash hard, as seen in 2024’s 15-20% correction.
2. Stopping SIPs in Market Dips: Market crashes (e.g., 2008,
2020) are buying opportunities. Stopping SIPs means missing out on low-cost
units.
3. Over-Diversifying: Stick to 3-4 funds per goal.
Too many funds (e.g., 10+) make tracking tough and dilute returns.
4. Ignoring Goals: Align SIPs with goals (e.g.,
₹10,000/month for a house in 10 years). Random investing leads to
disappointment.
5. Not Reviewing: Check fund performance
annually. If a fund consistently underperforms its benchmark (e.g., Nifty 500),
consider switching.
Real-World
Insight: In
2008, the Nifty fell 57%, but investors who continued SIPs in funds like ICICI
Pru Bluechip saw 14%+ CAGR by 2025. Patience is key.
Source: AMFI
How to Stop or Withdraw from an SIP?
If you
need to pause, stop, or withdraw from an SIP, here’s how:
- Pause SIP: Most platforms allow
pausing for 1-3 months. Your existing investment continues to grow.
- Stop SIP: Log into your platform, go
to the SIP section, and select “Cancel SIP.” Your invested amount stays in
the fund and grows until you redeem.
- Partial Withdrawal: Redeem a portion of your
units (e.g., ₹50,000 from a ₹2 lakh portfolio) via the platform. Money is
credited to your bank in 2-3 days.
- Full Redemption: Sell all units to exit the
fund. Be aware of exit loads (e.g., 1% if redeemed within 1 year for
equity funds) and taxes.
Example: If you cancel a ₹2,000/month
SIP after 2 years, the invested ₹48,000 (plus returns) remains in the fund as a
lump sum investment. You can withdraw it anytime via the app.
Expert
Tip: Avoid
stopping SIPs unless absolutely necessary. If funds are tight, reduce the SIP
amount (e.g., from ₹5,000 to ₹1,000) instead of cancelling.
Why SIPs Are Ideal for Long-Term Wealth Creation
SIPs
shine over long periods due to compounding and market cycles. The transcript
emphasized a 20-year ₹5,000/month SIP growing to ₹1 crore at 12% CAGR. Here’s why
long-term SIPs work:
- Market Cycles: Over 15-20 years, markets
recover from crashes (e.g., 2008, 2020), delivering 10-15% average returns
for equity funds.
- Compounding: Your returns earn returns,
creating exponential growth. For example, ₹10,000/month at 12% for 25
years grows to ~₹1.9 crore.
- Discipline: Regular investing removes
emotional decisions, ensuring you buy low and high.
Data
Point: AMFI
reports that equity mutual funds in India delivered ~14% CAGR over the last 20
years (2005-2025), outpacing inflation (6%) and FDs (7%).
Source: AMFI
Should You Start an SIP in 2025?
Despite
market volatility in 2024 (Nifty down 12-15%), 2025 is a great time to start
SIPs. India’s economy is projected to grow at 6.5-7% (RBI estimates), and
equity markets are expected to stabilize as corporate earnings improve. Small
and mid-cap funds, though overvalued per some experts (e.g., S. Naren), are
correcting, offering buying opportunities. For new investors, start with
large-cap or flexi-cap funds to balance risk and growth. If markets dip
further, your SIPs will buy more units, boosting long-term returns.
Source: RBI,
Economic Times
How to Maximize Your SIP Returns
1. Start Early: A 25-year-old investing
₹5,000/month for 20 years will have ~₹75 lakh at 12% CAGR, while a 35-year-old
will have ~₹30 lakh for the same period.
2. Step Up SIPs: Increase your SIP by 10-15%
annually as your income grows.
3. Diversify: Mix large-cap, mid-cap, and
hybrid funds to balance risk.
4. Stay Invested: Don’t exit during market dips.
Historical data shows markets recover within 2-3 years.
5. Choose Direct Plans: Save 0.5-1% annually on
commissions.
What Happens When an SIP is Ceased?
Definition: Ceasing an SIP typically means
permanently stopping the regular investments, either by choice or due to
specific circumstances (e.g., completing the SIP tenure or financial
constraints).
What
Happens:
- No New Investments: The auto-debit from your
bank account stops, and no new mutual fund units are purchased.
- Existing Investment Stays: The units you’ve already
accumulated remain invested in the mutual fund and continue to grow (or
decline) based on market performance.
- Options Available:
- Hold: Keep the units invested
to benefit from potential growth. For example, if you invested
₹5,000/month for 3 years (₹1.8 lakh total) in an equity fund and it grew
to ₹2.2 lakh, those units stay in the fund, earning returns.
- Partial Withdrawal: Redeem some units (e.g.,
₹50,000 worth) to meet financial needs. The remaining units stay
invested.
- Full Redemption: Sell all units to exit
the fund. You’ll receive the current value (NAV x number of units) in
your bank account, typically within 2-3 days.
- Tax Implications: If you redeem:
- Equity Funds: Short-Term Capital Gains
(STCG) tax at 20% if sold within 1 year; Long-Term Capital Gains (LTCG)
tax at 12.5% on gains above ₹1.25 lakh/year if held over 1 year.
- Debt Funds: Gains taxed at your
income tax slab rate, regardless of holding period.
- Exit Load: Some funds charge an exit
load (e.g., 1% if redeemed within 1 year for equity funds). Check the
fund’s scheme document.
- No Penalty for Ceasing: Stopping an SIP doesn’t
incur penalties, unlike stopping a fixed deposit prematurely.
Example: You’ve been investing
₹3,000/month in the Parag Parikh Flexi Cap Fund for 5 years (total invested:
₹1.8 lakh). The value is now ₹2.5 lakh. If you cease the SIP:
- Your ₹2.5 lakh stays invested,
growing at, say, 12% CAGR.
- If you redeem ₹1 lakh, you
may pay 12.5% LTCG tax on the profit portion (if gains exceed ₹1.25
lakh/year across all investments) and a 1% exit load if redeemed early.
Expert
Tip: Before
ceasing, assess your financial goals. If you don’t need the money, let the
units stay invested for long-term growth. Use an SIP calculator to estimate
future value.
What
Happens to an SIP When Someone Dies?
Definition: If the SIP investor passes
away, the investment doesn’t vanish—it’s transferred to the nominee or legal
heir, depending on the setup.
What
Happens:
- SIP Stops: The auto-debit for future
SIP installments ceases once the mutual fund house is informed of the
investor’s death.
- Units Remain Invested: The existing mutual fund
units stay in the fund, continuing to earn returns based on market
performance.
- Nominee Process:
- If a nominee is
registered (mandatory for most demat accounts), the units are transferred
to them after submitting:
- Death certificate
(attested copy).
- KYC documents of the
nominee.
- Transmission request form
(available from the mutual fund house or platform).
- Bank details of the
nominee.
- The nominee can choose to:
- Hold: Keep the units invested.
- Redeem: Sell the units and
receive the proceeds (current NAV x units).
- No Nominee: If no nominee is
registered, the legal heirs (per succession laws) must provide:
- Probate of will (if a will
exists).
- Succession certificate (if
no will).
- Legal heir certificate.
- This process is lengthier
and may take 1-3 months.
- Tax Implications: No tax is levied on
transmission to the nominee/heir. However, if the nominee redeems the
units:
- Equity funds: STCG (20%) or
LTCG (12.5% on gains above ₹1.25 lakh/year).
- Debt funds: Taxed at the
nominee’s slab rate.
- Exit Load: Applies if units are
redeemed within the exit load period (e.g., 1% within 1 year for equity
funds).
Example: Rajesh, 40, had a ₹10,000/month
SIP in SBI Bluechip Fund (5 years, value: ₹8 lakh). He passes away, with his
wife as the nominee. After submitting the death certificate and KYC, the units
are transferred to her. She can hold them (potentially growing to ₹15 lakh in
10 years at 12% CAGR) or redeem ₹8 lakh, paying LTCG tax on the profit.
Expert
Tip: Always
register a nominee when starting an SIP to simplify transmission. Update
nominee details if life circumstances change (e.g., marriage). Inform family
about your investments to avoid delays.
What
Happens When an SIP is Stopped?
Definition: Stopping an SIP is similar to
ceasing it—you voluntarily end the regular investments, often via the
investment platform or mutual fund house.
What
Happens:
- Auto-Debit Stops: No further deductions from
your bank account.
- Units Stay Invested: Your accumulated units
remain in the fund, subject to market performance.
- How to Stop:
- Log into your investment
platform (e.g., Groww, Zerodha Coin).
- Navigate to the SIP
section, select the SIP, and click “Cancel” or “Stop SIP.”
- Alternatively, contact the
mutual fund house or your bank to cancel the auto-debit mandate.
- Options After Stopping:
- Hold: Let the units grow. For
example, ₹2 lakh invested could become ₹3.5 lakh in 7 years at 12% CAGR.
- Switch: Move units to another
fund within the same fund house (e.g., from small-cap to large-cap for
lower risk). May incur exit load or tax.
- Redeem: Sell units partially or
fully. Funds are credited in 2-3 days.
- Tax and Exit Load: Same as ceasing (STCG/LTCG
for equity; slab rate for debt; exit load if applicable).
- No Penalty: Stopping an SIP is free,
but check if your platform requires a minimum investment period.
Example: Priya stops her ₹5,000/month
SIP in Mirae Asset Large & Midcap Fund after 2 years (invested: ₹1.2 lakh,
value: ₹1.5 lakh). She cancels it via Paytm Money. Her ₹1.5 lakh stays
invested, growing at market rates. If she redeems, she pays 12.5% LTCG tax on
gains above ₹1.25 lakh/year and a 1% exit load if within 1 year.
Expert
Tip: If
stopping due to financial strain, consider reducing the SIP amount (e.g., from
₹5,000 to ₹1,000) instead of stopping entirely. Restart when finances improve.
Source: Groww, Zerodha
Coin
What
Happens When an SIP Payment is Missed?
Definition: Missing an SIP means the
auto-debit fails due to insufficient funds, technical issues, or bank mandate
problems.
What
Happens:
- No Units Purchased: The missed SIP installment
doesn’t buy new units, but existing units remain invested and unaffected.
- Platform Behavior:
- Most platforms (e.g.,
Groww, Paytm Money) retry the debit 1-2 times within a few days.
- If the retry fails, the SIP
is marked as “missed” for that month.
- Impact:
- Single Miss: No major impact. Your
investment continues with the next scheduled SIP.
- Multiple Misses: Some fund houses pause or
cancel the SIP after 3-4 consecutive misses (varies by platform/fund).
- No Penalty: Missing an SIP doesn’t
incur fines, but you miss out on rupee cost averaging for that month.
- How to Fix:
- Ensure sufficient funds on
the SIP date (e.g., ₹2,000 + ₹500 buffer for a ₹2,000 SIP).
- Check bank mandate status
on your platform or with the fund house.
- If paused, reactivate the
SIP via the platform or contact the fund house.
- Tax/Exit Load: No tax or exit load
applies unless you redeem units.
Example: Anil’s ₹3,000/month SIP in HDFC
Mid-Cap Opportunities Fund fails in June due to low balance. No units are
bought that month, but his existing ₹4 lakh portfolio remains invested. The
platform retries on June 10. If successful, the SIP continues; if not, he adds
funds before July’s SIP.
Expert
Tip: Align
your SIP date with your salary credit (e.g., 5th of the month). Use UPI autopay
for reliability. Monitor bank balance via alerts to avoid misses.
Source: Paytm
Money, AMFI
What
Happens If an SIP is Cancelled?
Definition: Cancelling an SIP is a
deliberate action to terminate the regular investment, similar to stopping or
ceasing it.
What
Happens:
- Auto-Debit Ends: No further deductions from
your bank account.
- Units Stay Invested: Your accumulated units
continue to grow based on the fund’s performance.
- How to Cancel:
- Via Platform: Log into
Groww, Zerodha Coin, or Paytm Money, go to SIPs, and select “Cancel SIP.”
- Via Fund House: Submit a
cancellation form (online/offline) to the mutual fund house.
- Via Bank: Cancel the
auto-debit mandate (less common, as platforms handle this).
- Options Post-Cancellation:
- Hold: Keep units invested for
long-term growth.
- Redeem: Sell units partially or
fully. Funds are credited in 2-3 days.
- Switch: Move to another fund
(e.g., from equity to debt for stability).
- Tax and Exit Load: Same as ceasing/stopping
(STCG/LTCG for equity; slab rate for debt; exit load if applicable).
- No Penalty: Cancellation is free, but
check for minimum tenure requirements (rare).
Example: Sneha cancels her ₹2,000/month
SIP in Axis Bluechip Fund after 3 years (invested: ₹72,000, value: ₹95,000).
She cancels via ET Money. Her ₹95,000 stays invested. If she redeems, she pays
12.5% LTCG tax on gains above ₹1.25 lakh/year and a 1% exit load if within 1
year.
Expert
Tip: Before
cancelling, evaluate if pausing (1-3 months, available on most platforms) is
better. Restart the SIP later to stay on track with your goals.
Key
Considerations Across All Scenarios
- Market Risk: SIP units are
market-linked. Their value can rise or fall, whether you cease, stop,
cancel, miss, or after death. Long-term holding (10+ years) typically
smooths out volatility.
- Goal Alignment: Review your financial
goals before altering an SIP. For example, a 15-year SIP for retirement
should ideally continue unless urgent funds are needed.
- Communication: Inform family about your
SIPs and nominee details to avoid complications, especially in case of
death.
- Tax Planning: Redeeming units triggers
taxes. Plan withdrawals to minimize tax liability (e.g., stay within ₹1.25
lakh LTCG limit for equity funds).
- Platform Support: Use SEBI-registered
platforms like Groww, Zerodha Coin, or Paytm Money for easy SIP management
and transparency.
Practical
Tips to Manage SIPs Effectively
1. Set Realistic Amounts: Start with an affordable SIP
(e.g., ₹500/month) to avoid misses or cancellations.
2. Register a Nominee: Ensure smooth transmission in
case of death.
3. Monitor Regularly: Check your portfolio quarterly
on platforms like Value Research or Moneycontrol.
4. Use Step-Up SIPs: Increase SIP amounts as income
grows to boost corpus.
5. Avoid Panic: Market dips are normal. Continuing
SIPs during downturns (e.g., 2024’s 12% Nifty correction) buys more units at
lower prices.
Real-World
Insight: In
2020, the Nifty fell 38% during COVID. Investors who continued SIPs in funds
like ICICI Pru Bluechip saw 15%+ CAGR by 2025, proving the value of
persistence.
Source: Moneycontrol,
Value Research
Conclusion
Whether
you cease, stop, cancel, miss, or face the investor’s death, an SIP’s existing
units remain invested, offering flexibility to hold, redeem, or switch. Missing
a payment has minimal impact if fixed quickly, while stopping/cancelling allows
you to pause without losing your investment’s potential. In case of death, a
nominee ensures smooth transmission. To maximize benefits, align SIPs with your
goals, maintain sufficient funds, and stay invested long-term. Use trusted
platforms like Groww or Zerodha Coin, and consult a SEBI-registered advisor for
personalized advice.
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