Due to less interest on FD, people are thinking it better to invest in mutual funds. If you invest in it through SIP, then the risk of risk is less. Also get better returns.
Investing in Mutual Funds through SIP
Since the Corona period, less interest is being given on FD in banks. In such a situation, people are thinking better to invest in mutual funds. Although money can be invested in many ways, but the safest and better way is Systematic Investment Plan (SIP). There is no fear of risk in this, as well as the returns are also good. One can invest in SIP in two ways, first as a lump sum and second at a regular interval. If you invest in it for a long time then it will be more beneficial. It is important to keep some things in mind while choosing a plan and investing money in mutual funds, it can give you double profits.
Choice of investment process
It is important to choose how you want to invest in mutual funds. If you want to invest a lump sum amount, then take a separate mutual fund, while if you want to invest in installments, then take a plan accordingly. The volatility of the market makes a lot of difference on lump sum investment but if you are investing at regular intervals then the volatility will not make much difference. When the market is down, more fund units will be available, whereas when the market is at the top, fewer units will be available, but in the long run, the average gets better.
goal setting
Before you start investing in SIP, set your goals. You see how much risk you can take and how much you can invest according to your ability. Also keep in mind that for how long you are taking it. By doing this you will get benefit in future.
More profit in the long term
It is also important to keep in mind the duration for which you want to do SIP. Long term SIP gives higher returns. There is a 15*15*15 formula for investing in SIP. That is, if you deposit 15 thousand rupees every month for 15 years in a scheme giving annual return of 15 percent, then you will get 1 crore in return. Therefore, decide the tenure of the mutual fund according to your capacity.
Know how much tax will be charged
Tax is also deducted on the amount of mutual funds, although this is not the case in some plans. But before investing, check this thing that how much tax will have to be paid in the plan in which you are going to invest. Usually, short-term capital gains of 15 per cent on redeeming equity funds within a year and 10 per cent on gains above Rs 1 lakh per annum after one year. Whereas in debt fund units redeemed within three years will attract tax of 20 per cent along with indexation benefits. Similarly, the tax ratio is different in different mutual funds.
Don’t forget to check portfolio
It is important for you to know the complete details of the mutual fund scheme under which you are going to invest in SIP. So do not forget to check the portfolio of the company. While choosing it, keep in mind that its goal and risk level should be according to your profile. Also, the past performance of the company should be better. During this, also check the expense ratio and financial ratio.
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