Systematic investment plan (SIP), this is not actually very older schemes in the investment market. In fact, this has been a new plan which has taken from the Mutual Fund bank ground. A mutual fund requires Rs. 5000 of minimum investment and all the common people may not be able to purchase when it comes into the investment market. So the fund managers had a plan to implement it in the investment market to help the common people a way to make money. Now a day, banks are gradually decreasing the interest rates which used to be the investment formula when interest rates were high. If you consider stock exchange market or unit link policies or mutual funds where a person require to put lot of money at a time and there is no guarantee for that money under the current marketing situations.
So the fund managers had a good idea to pick the SIP’s of different big companies like Reliance, Tata and some banks are also involved like UTI, ICICI etc. The system is well designed because an investor don’t need to put a lot of amount at one time but require small amounts on a monthly basis and purchase the no. of units for the equal value. There are some people who never able to afford lot of money at a time but they can afford a small amounts on a regular basis. This is designed for a certain period of time, on the contrary, an investor can stop at any point of time and get back the deposited amount. The return value will be based on the company’s performance and the % of profit by that time. Overall a minimum of 20% can be expected from the company if the scheme continues for long time.
This has been a very popular and famous investment plan and people are very attractive to this scheme since there is no restriction for payments and investment limits. A minimum investment in this scheme is Rs. 1000 and period depends on the investor and it can be broken at any point of time.
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