What is a SIP investment
A sip investment is a short-term investment plan. It has been designed to be a quick and easy way to invest in the stock market without having a large sum of cash. Although the returns are higher than those for regular savings accounts, your initial investment is low.
How does it work?
The way it works is that you make a deposit into a brokerage or other account and then place an order to buy (or sell) shares at a predetermined price within a set time, quite often two months, giving you time to accumulate enough cash for the full purchase.
When you place your order, the money that is in the account will be allocated to the investment. So if you have $100 in your account and want to buy shares in Company A at $50 each, you’ll only be able to buy half of what you wanted. The rest may remain unallocated or it may be used for another investment, depending on the brokerage.
If you are using a brokerage that charges commissions to place orders, your cost will vary because smaller orders generate commission costs higher than larger ones. If the share price declines after you’ve bought them, you could have paid more than they’re worth. However, if they go up in value, you’ll be fine. Plus you can always sell them before the end of your time period and lock in any profits that way.
Who can do SIP investment?
Some SIPs are more suitable for people who are looking to invest smaller amounts over a longer period of time. This is because they typically have lower charges or management fees, which might be more suited for people who want to invest small amounts each month. For example, if you’re contributing Rs 10,000 per month to your SIP for 5 years without changing your investment amount, your total investment amount will be Rs 60 lakhs.
Tata Mutual Fund offers a variety of SIPs that suit different investors and requirements. The TATA Regular Savings Fund SIP is designed for investors who want to set aside a fixed amount every month with no exit load and no penalty for withdrawal before the expiry date.
For investors who are looking to make regular investments of smaller amounts, there are two types of SIPs offered by Tata Mutual Fund.
There’s no entry load for the Regular Savings Fund SIP, making it a good option for investors who plan to invest small amounts regularly. And if you’re worried about market fluctuations, Tata Value Advantage Fund SIP can help you. This fund invests in diversified equity and debt stocks so that your investments are protected against market fluctuations.
Tata Mutual Fund offers a wide range of mutual funds from across different categories allowing you to invest in them depending on your risk appetite, investment horizon, and other personal requirements. If you have any questions about SIPs or mutual funds, you can call our customer care number and speak to one of our representatives.