Mutual funds are lifesavers, and investing through Systematic Investment Plan (SIP) is a smart way of investment. It is considered as one of the best investment options due to the costs involved. Even mutual funds tend to be tax efficient as compared to other modes of investments.
But are you new to this concept of mutual funds? Do you have any idea how and where to start? The first step is to create financial goals before anything. A financial goal makes the total investment clearer, and the process goes smoothly. Then it is followed by the second step of starting a fund. It is important that you first determine your goals as per your requirements, only then can you formulate further plans without any problems.
What is the minimum fund required to invest in SIP?
The second step is to start funding. Usually, the minimum amount to start an investment in mutual funds is very low. For an investment in Systematic Investment Plan (SIP), the minimum amount is Rs. 500 only. The investor can start an investment with a very low amount where the professional fund managers manage the investment. But the whole investment is entirely dependent on your financial planning and wealth management goals. So, it is necessary to have a secured financial goal. However, the minimum amount even depends upon the category that an investor belongs to.
Risk and returns are equally proportional to each other. Hence, for an equity fund, risk involvement is higher than in balanced and debt funds. The risk exposure in a SIP is dependent on the investment option, its risk profile, and liquidity of the investment. But by applying for diversification in the portfolio, the risk involved in SIP is reduced by the fund manager or fund house. So, it is evident that there are ways to work around any possible inconveniences or risks.
