Why Invest in SIP - 10 Reasons Why SIP the Best Investment

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Are you looking to invest in mutual funds ?  Are you unsure whether or not to go with the SIP route? This post will explain 10 reasons why SIP in mutual funds is one of the most popular investment options.


Lack of funds is one of the main reasons people are unable start their investment journey early in their lives. You already have many financial obligations to make once you begin earning in your 20s.



Systematic Investment Plan, also known as SIP, can help you start investing in mutual funds. But Why should you invest in SIP? These 10 reasons will help to better understand SIPs.

Low Investments

Most mutual fund schemes let you start investing as low as Rs. 500 per month. This is a significantly lower investment amount than other popular options.

This means that even those in their 20s can invest to reach their future goals, even if they have just started working.

The SIP Amount can be adjusted in any way you like

SIPs can be very flexible. You can start a Rs. You can start a Rs. 1,000 SIP in any mutual fund scheme you choose. There is no need to continue investing only Rs. 1,000

You have the option of increasing your savings in the future or starting a new SIP within the same mutual fund or another scheme.

You can stop or skip the SIP

You don't have to make SIP investments every month. You can opt out of the SIP investment for a few months, or stop it altogether if you wish.

In an emergency situation, you can cancel your SIP payments for a few month if you don't have enough funds.

 Makes you a disciplined investor

The second reason is important Why SIP is the best, Its ability to make you a disciplined and responsible investor. Many investors begin investing but fail to invest regularly. To reach your financial goals, you need to make regular investments.

SIPs are a disciplined way to invest. You can set a monthly investment amount that is automatically invested in the plan of your choice. This eliminates the need to do the monthly investments.

Timing the market - What is it?

It is nearly impossible to accurately time the markets on an ongoing basis. However, SIPs do not require you to accurately time the markets.

Market conditions do not affect your investment decisions. You will continue to invest a set amount each month. If the market is low, you will receive more units and less if it is high.

Lower Average Cost for Mutual Fund Units

SIPs, as mentioned above, can help reduce the average cost of mutual fund units. When the market is falling, the NAV of the fund will be low and high when it performs well.

In the long-term, investing in a fixed amount via SIP will result in a lower average cost for purchasing units than investing in a lump sum when the market is high.

The power of compounding

When you start your SIP, select the growth option. The returns your investment generates will then be added to your initial investment amount. This creates the compounding effect which can generate great long-term returns.

If you are looking to achieve long-term financial goals then starting a SIP in any plan and choosing the growth option could be a good idea.

There is no emotional investment

Investors can find it difficult to resist being influenced by market movements. People are often influenced by market volatility and make emotionally driven investment decisions that don't always deliver the expected results.

SIPs are designed to protect investors from making these mistakes. You can simply continue investing a fixed amount each month, without worrying about market volatility in the short-term.

Complete Transparency

In India, the mutual fund industry has seen rapid growth over the past few years. AMFI and SEBI have established strict guidelines that all mutual fund schemes and AMCs must follow in order to protect investors' interests.

Investors who are just beginning their investment journey via SIPs have found the mutual fund industry transparent, safe and secure.

Online Portfolio Tracking

Many top AMCs allow investors to manage their mutual funds investment online. After you have started a SIP you will be given a username and password that you can use to access your account at any time.

You can track your SIP and switch to another scheme, stop SIP or start a new SIP. You can even redeem units from the comfort of your own home.


You now have a lot of reasons. Why SIP? You should consider investing in stocks and bonds as a great option for investment. It will be more difficult to reach your financial goals if you delay investing.

However, it is important to understand your investment profile. This includes your risk appetite, investment goals, and investment horizon.

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