Thanks to demonetization, several investors have been reintroduced to the world of mutual fund investments. One of the most popular ways to invest in mutual funds is through systematic investment plans (SIP). According to data posted by the AMFI (Association of Mutual Funds in India) – the mutual fund regulator of India is under the purview of SEBI. The SIP mutual funds account stood at 4.91 crores in December 2021. Clearly, SIP investments are quite popular among retail investors. In this article, we will understand some benefits of SIP investments that you must be aware of before investing in mutual funds through the SIP mode of investment.

Benefits of SIP

There are several benefits of investing in mutual funds through the SIP mode of investments. Let’s understand some of these benefits:

Disciplined Investing

As SIP investments are automated in nature, they ensure that an investor regularly invests in mutual funds on a periodic basis. So, this instills financial discipline among investors which is quite important in the financial world to ensure the optimum working of your investments.

Rupee Cost Averaging

An investor ends up accumulating a higher number of mutual funds units when the markets are down as compared to when the markets are touching peaks and vice versa. This averages out the total cost spent against buying mutual fund units. These investments enjoy this concept of rupee cost averaging

No Need to Time The Markets

Due to the concept of rupee cost averaging, an investor does not need to time the markets. Timing the markets, a concept rarely achieved by an investor at all times believes in the concept of buying low and selling high. However, it is not easy to predict the market movements aptly at all times. Rather than timing the markets, these investments aim to follow the concept of time in the markets.

Low Minimum Investment Amount

SIP investments permit individuals with limited earnings to invest in mutual funds on a regular basis. During this, the minimum investment amount to invest in SIP is just Rs 100 per month. Hence, it allows individuals belonging to economically backward classes to invest in mutual funds. Something they couldn’t have achieved before if it wasn’t for SIP investing.

Power of Compounding

Compounding is the method of reinvesting the yields earned by an investor on their investments. So, this simple yet powerful approach allows investors to transmute their insignificant sum of money into a substantial sum of money. Compound ensures that your money grows at an exponential rate. To maximize the benefits of compounding on your This investment, you must invest in mutual funds online as soon as possible. 


To help you with creating a more accurate financial plan. Investors are blessed with an investment tool known as mutual funds SIP calculator that allows them to plan their investments in a better way. So, a SIP return calculator could either used to determine the expected future value of your investments. Or could use to derive a SIP monthly amount needed to reach a particular corpus. Happy investing!

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