SIPs (Systematic Investment Plans) are one of the most popular ways of investing in Mutual Funds. SIPs help inculcate financial discipline and build wealth for the future. With SIPs, you can start small and gradually build a corpus in a systematic and planned manner.
SIP is better option than RDs(Recurring Deposits) when talked about performance & liquidity. SIP works on two effective principles.SIPs can help you escape market volatility by eliminating the guessing game of market performance. Regular investing ensures that the average purchase cost is evened out in the long run.This minimizes your risk and ensures you acquire investments at a lower average cost per unit.
Saving a small sum of money regularly for long periods of time can have an exponential impact on your investment because of the effect of compounding.Power of compounding is a money multiplier strategy used in Mutual Funds.