Mutual fund investments are high and risky. So, middle class and rural people did not invest in it. Due to high competition, companies introduced innovative and different ideas to increase the number of investors. HDFC also introduced SIP.
What is HDFC Mutual Fund SIP?
SIP is Systematic Investment Plan. It is same as recurring deposit. Money is paid monthly similar to that of recurring deposit. Since the investment amount is high, it is divided into smaller amounts. The smaller amounts are paid as monthly instalments. This plan helps a middle class person to become a mutual fund investor.
Different dates are allocated for paying the amount. SIP can be paid on 1st, 5th, 10th, 15th, 20th and 25th of a month. You can choose any date from the above dates. Moreover, you have different options of paying the money. HDFC provides excellent facilities for paying money. You can give a post dated cheque or can opt for auto debit. Auto debit allows the money to be debited from your bank account automatically. The instalments can be paid monthly as well as quarterly, it depends upon the customer needs. Hence, these plans are flexible also.
Benefits of Systematic Investment Plan:
SIP has numerous advantages. Long term benefits, rupee cost averaging, lower per unit acquiring cost, increasing investment value and low monthly investments are some of them. There is always difference between the returns for a person investing in normal plan and SIP. The investment is made over a long time period. During that period, units are purchased at suitable price depending upon the market condition. Averaging is achieved by this way.
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You can also read more details on various schemes in http://www.investmutualfunds.net/.
Balajee Kannan
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