SIP Investment: Common people are getting smarter about investment. We can see a propensity among some people to invest a portion of earnings in a SIP, or mutual fund, where the investor may have to face market-related risks. But as we all know, no risk, no gain. Government banks and post offices are there to provide guaranteed security and return, compared with a lower interest rate than SIP investments. From SIP investment, an investor can get a handsome interest rate.
LIC Mutual Fund Asset Management Company
Companies have reduced the minimum amount for starting a Systematic Investment Plan (SIP) to just Rs 100. Recently, LIC Mutual Fund Asset Management Company (AMC) has reduced the minimum amount of Daily SIP to Rs 100. Now investors can start SIP with Rs 100 in select schemes of LIC mutual fund and increase investment in multiples of 1 rupee. Also, LIC MF has also added the option of Daily SIP to its liquid fund, giving people more opportunity to grow their money over time. From an investment perspective, an SIP of Rs 100 is a very small amount. Let’s know how beneficial is an SIP investment of just Rs 100 in today’s era.
New investors will benefit from low SIP amount
The low SIP amount encourages small investors, especially first-time investors, to enter the financial market. Many people from rural or low income groups hesitate to invest with a higher amount. Reducing the minimum SIP amount is in line with the government’s ‘Jan Dhan Yojana’ and other financial inclusion programs. If a small amount is invested regularly, the power of compound interest can give it good returns in the long term. Moreover, investing a lower amount also keeps new and cautious investors less worried about potential losses at the time of market fall.
Better returns in the long term
By reducing the minimum amount of SIP to Rs 100, fund houses are ensuring that mutual funds are not just for high-net-worth investors but also for people from all income brackets. Mutual funds have established itself as an essential tool for goal-based investing, helping people achieve their financial goals. Due to compounding, investing in mutual funds gives better returns in the long run.
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