Discipline & Consistency pay rich dividends in any
aspect of life. Investment activity is no different.
And when you invest in a Systematic Investment Plan
(SIP), it makes you a disciplined investor, resulting
in multiple advantages. Here are a few of them:
SIP helps you build wealth over a period
of time -To realize your dream of buying a car, house or for
that matter ornaments for your beloved family members. For instance,
an investment of Rs. 2000 /- invested every month in a reputed
income fund during Jan 00 to Dec 01, resulted in an annualized
return of over 16 %!
Take a quick look at how your regular investment
of Rs.2000/- p.m. can grow after 10 years at different rates
of return.
Future
value of 120 installments of Rs.2000 p.m.
At 7%
At 8%
At 9%
At 10%
3,45,409
3,66,710
3,87,029
4,08,753
A SIP in mutual funds has an edge over other
investments, even if done regularly. Not only are the returns
superior to a bank deposit or recurring deposit (RD), the
liquidity benefit i.e. amount on demand, makes it an ideal
investment avenue.
By investing a fixed amount regularly,
you buy more units when prices are low and less units
when prices are high. As a result your average cost
could be lower than average price and you have increased
chances to gain without having to predict or monitor
the markets. Look at this illustration to know how you
could benefit in terms of lesser average cost.
Average Purchase Price of Units: Rs.12.83 (i.e. Rs.77/6
months).
Average Cost of Units: Rs.12.70 (i.e. Rs.12000/945.188
units).
Month units
Amount invested
Purchase price
No. of
1
2000
13
153.846
2
2000
15
133.333
3
2000
11
181.818
4
2000
12
166.667
5
2000
14
142.857
6
2000
12
166.667
It is a hassle free investment.
A one time transaction of handing over a form, and post
dated cheques, saves you a lot of paperwork and recurring
inconvenience.
It is a tax efficient plan. Your investment in Mutual
Funds could give you tax benefits greater than on other
investments, e.g. Bank Fixed Deposits.
Example:
Interest rate on say 3 year FD
= 6.5%
Tax rate (Say your slab is 30%)
= 2.25%
Post tax return
= 4.25%
Returns from SIP in income funds
(low to moderate risk) say for same period
= 8%
Long term capital gains tax rate
= 0%
Return post tax
= 8%
Customized plans
We offer a wide variety of products. And we'll help identify
the one that is most suited to your needs. Come & explore
how SIP can help you possess and enjoy all that you have yearned
for.
