Investment Via SIP: Know How You Can Invest In Shares Every Month With Less Risk

The total demat accounts in the country have crossed the 100 million-mark for the first time ever, showing rising participation of investors in the stock market. Along with many investment avenues, mutual fund is a good avenue for investors. Investors can put in their money in MFs through systematic investment plans (SIPs). Here’re the benefits of SIP:

Mutual funds also involve risks but the risk involved here is less than direct equity investments as the MFs are managed by professional fund managers and investment is diversified into various companies and sectors.

No Big Investment Required

For investing in mutual funds through SIP, one does not need to have a large quantum of investment. Investors can start SIP with as low as Rs 100 monthly funds and the amount can be as higher as you want. However, the monthly SIP amount cannot be increased or decreased midway. To increase the investment amount, one can start a new SIP.

SIP Develops Healthy Investment Habit

If you invest in mutual funds through SIP, it helps develop a healthy saving or investing habit in you. It is because one needs to invest the amount every month and can cut other expenditures.

Auto Investment Deductions

You can set any date of the month on which you want to invest every month. If you have set 10th of every month and link bank account with the mutual fund account, the SIP amount will automatically deduct from the account on the pre-set date.

You Can Do It Online Like Any Other Investment

You can start an SIP online on platforms like Groww, Zerodha, Motilal Oswal, etc. However, a KYC will be required, which can also be done online. No physical paperwork is required to start a mutual fund SIP. You can also check the performance of your mutual fund investment in the dashboard of the app.

According to the latest data from depository firms National Securities Depository Ltd (NDSL) and Central Depository Services Ltd (CDSL), the total number of demat accounts in India stood at 84 million in January. During the month, 3.4 new demat accounts were opened. About 2.9 million accounts were opened in February, 2.8 million in March, 2.4 million in April, 2.7 million in May, 1.8 million in June, 1.8 million in July, and 2.2 million in August.

In August, debt mutual funds in India saw healthy fund inflows. Fixed income funds cumulatively received a net of Rs 49,164.29 crore in August 2022, jumping a massive 897 per cent over their previous collection of Rs 4,930.08 crore in July. Out of these, liquid funds amassed the most value, worth Rs 50, 095.82 crore.

This was a turnaround from the Rs 70,213 crore worth of outflows that debt mutual funds witnessed in the second quarter of 2022. For the uninitiated, debt funds usually invest in relatively risk-free instruments compared to equity, like corporate and government bonds, debt securities, and more.

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