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Why Mutual Fund's SIPs Schemes are Ideal for Building Financial Wealth?

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Mutual Fund Systematic Investment Plan or SIP was introduced 25 years back in India. Till now, Mutual fund plans has covered a long journey in helping investors to reach their financial goal. Mutual funds investment emerges as a secure option to accomplish a long term financial objective. SIPs found to be helpful in creating immense wealth for the investors who regularly invested in a respective long term financial plan.

Read the advantages of SIP investments

Following are the significant features of systematic investment plans which clearly explain why it is considered to be a perfect choice to build strong financial wealth:

Easy to start: Mutual funds SIPs provides a wide range of schemes based on different categories of funds to the investors. Any individual can easily start a SIP scheme in a fund on the basis of his or her investment horizon, risk profile and fund objectives.

No Market Risk: People usually hesitate to invest in mutual fund schemes because they’ve an ideology that their wealth may get ruined due to market fluctuations. But, in SIPs, investor just needs to invest a fixed amount on a fixed date regularly every month without bothering about the behavior of the market. Investors get benefitted from rupee cost averaging when they invest a certain sum in a decent financial plan.

Flexible for Investors:- Mutual Fund SIPs have higher flexibility. Such plans do not have any restriction or penalties on SIP payments and withdrawals for the investor. You can start your systematic investment plan with a minimum investment of just Rs 500 from anywhere. Also, there is a provision for an investor to stop their active SIPs plan anytime but only after the completion of minimum lock-in period.

Follows Disciplined Approach:- SIPs brings disciplined approach to build your wealth by investing regularly in a particular investment scheme. Investors can build a big corpus to secure his financial future by investing a fixed sum every month after calculating his monthly expenses, other expenses and savings. Regular investment in systematic plans develops a habit of savings and eventually redirects the investor to a path of successive financial stability.

Save Taxes:- Investment in mutual fund SIPs scheme also offers some attractive tax benefits to business owners and salaried working professionals. Capital gains in a long term SIP investment plans are usually free from tax and also the dividend that an investor receives from such schemes are also tax free. Individual can save up-to Rs 150,000 per year under section 80 C of the Income Tax Act 1961 when they buy ELSS plan to build their wealth.

See the top performing SIP ELSS funds

Assure High Returns:- As SIPs are benefitted from the power of compounding therefore as an investor you’ll be receive high returns as soon as you start investing and as long you stay invested in SIPs. Almost every mutual fund in SIP scheme beat benchmark return and offers highest return to the investor after the maturity of a policy. But investor should accomplish at least 3 years investment horizon if he or she has chosen equity mutual fund for the investment. However, you should also review individual performance of your SIP every year to ensure

Did you know which are the best mutual funds for SIP


For a newbie and young investor, it is always consult to financial advisor to know positive and negative factors associated with available funds in SIPs. Your financial planner after studying your risk profile will suggest you the best SIP scheme for your potential wealth creation. So, start investing now in mutual fund scheme to secure future of your family.

To calculate how much you can get by SIP investment, try our SIP Calculator

Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.

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