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Finance

10 best discount brokers in India

For ages, all stock market investors had to endure one common burden – high brokerage charges. Thankfully the advent of new technology and rapid adoption of internet services has made discount brokers in India more widespread and accessible to retail investors than ever before in stock market.

Who are discount brokers?

As against a full-service broker, discount brokers undertake market orders for reduced commissions. On the flip side, they do not provide investment advice. A discount broker is suitable for those with limited capital capabilities and those unwilling to pay for trade guidance.

How are discount brokers helpful?

They may be called discount brokers but there is no compromise in the services provided. These discount brokers’ easy-to-use trading platforms provide state-of-the-art facilities. Another beneficial thing is that most of the discount brokers in India offer very attractive brokerage fees and complete transparency along with additional benefits like advanced charts, real-time news, and analysis.

The top 10 stockbrokers in India

Here is a list comparing the brokerages of different discount brokers in India:

Broker Equity Delivery Equity Intraday Equity Futures Equity Options
Zerodha Nil 0.03% or Rs.20/ executed order, WIL 0.03% or Rs.20/ executed order, WIL Flat Rs.20/ executed order
Upstox 2.5% or Rs.20/ executed order, WIL 0.05% or Rs.20/ executed order, WIL 0.05% or Rs.20/ executed order, WIL Flat Rs.20/ executed order
Angel Broking Nil 0.25% or Rs.20/ executed order, WIL 0.25% or Rs.20/ executed order, WIL 0.25% or Rs.20/ executed order, WIL
Groww 0.05% or Rs.20/ executed order, WIL 0.05% or Rs.20/ executed order, WIL Flat Rs.20/ executed order Flat Rs.20/ executed order
5paisa Flat Rs.20/ executed order Flat Rs.20/ executed order Flat Rs.20/ executed order Flat Rs.20/ executed order
Kotak Securities 0.25% of transaction value Nil Intraday – Nil

Others – Rs.20/executed order

Intraday – Nil

Others – Rs.20/executed order

PayTM Money Rs.0.01/ executed order 0.05% or Rs.10/ executed order, WIL 0.02% or Rs.10/ executed order, WIL 0.02% or Rs.10/ executed order, WIL
Alice Blue Nil 0.05% or Rs.15/ executed order, WIL 0.05% or Rs.15/ executed order, WIL Flat Rs.15/ executed order
Samco 0.20% or Rs.20/ executed order, WIL 0.02% or Rs.20/ executed order, WIL 0.02% or Rs.20/ executed order, WIL 0.02% or Rs.20/ executed order, WIL
Fyers Nil Flat Rs.20/ executed order Flat Rs.20/ executed order Flat Rs.20/ executed order

Zerodha remains the most popular broker. Other players like the new entrant PayTM Money, Alice Blue, Samco, and Fyers also round up the record of top 10 cheapest stockbrokers in India.

Summing up

The current market scenario has the investor spoilt for choice. Depending upon the strategies used, participants now have various options to choose their partner in their stock market journey. To simplify the process of investing and reach your goals faster, you can also consult a financial expert. They can help you map out your investing strategy and this is especially useful at the beginning of your investing journey.

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Finance

Should you invest in low-cost index funds to create wealth?

Index funds are designed to replicate the performance of their underlying portfolio. These funds give investors an opportunity to spread their portfolio across securities of a specific index without changing portfolio composition. Index funds that invest in NIFTY have a portfolio comprising of the top 50 company stocks. Similarly, an index fund that invests in SENSEX will comprise of top 30 underlying stocks that form the index.

Because the fund manager of an index fund does not actively buy or sell securities from its underlying portfolio to generate capital appreciation, it is called a passive fund. The fund manager does not have to do intrinsic research to pick stocks for the index fund portfolio, neither do they have to manage the fund actively or decide which stocks to hold or which stocks to sell. This type of investment style is considered passive where the index fund aims to replicate the performance of its underlying securities rather than trying to outperform the benchmark like most other schemes.

Since these funds mostly invest in indexes that comprise of top 50 or top 30 company stocks, they give investors exposure to bluechip stocks. Blue-chip stocks consist of stocks belonging to large cap companies that are financially stable and have a solid reputation in the industry. Hence, investors who want exposure to a portfolio of securities that are less volatile than other equity oriented mutual fund schemes can consider investing in index funds.

Are index funds a low cost investment?

As mentioned earlier, index funds are passively managed. Although they have a fund manager overlooking the overall performance of the portfolio, there is very little participation involved. This makes index funds a cost effective investment option as opposed to other actively managed mutual funds that have a relatively high expense ratio.

The expense ratio of an index fund is usually below 1%, sometimes even less than .50%. For those who do not know, the expense ratio is the total recurring costs like management fees, operational costs, etc. which the Asset Management Company must take care for ensuring the smooth operation of the index fund. These expenses are recovered by the AMC by levying an expense ratio on the mutual fund. The expense ratio isn’t an additional charge but is a sum that is deducted from the investor’s total capital gains. In the long run, those who invest in mutual fund schemes with a high expense ratio might end up giving away a large portion of their capital gains.

Can you create wealth with index funds?

To create wealth with market linked schemes like index funds, investors need a long investment time horizon spanning over 5 to 7 years or more. That’s because even if you look at the stock market, you need to have patience to create wealth. Equity markets are volatile in nature and investments made in equity can generate negative returns in the short run.

Also, if you are planning on building a wealth corpus that can be Rs 1 crore or more, you need to start a monthly SIP in index funds. Systematic Investment Plan allows retail investors to save and invest a fixed sum regularly in index funds. Investors can decide an amount that they are comfortable investing and invest that sum regularly till their investment objective is accomplished. Investors who don’t know exactly how much to invest regularly to get closer to their ultimate financial goal can take the help of the online SIP calculator.

 However, the key to long term wealth creation is systematic and disciplined investing and investors must ensure that they do not stop their investment journey midway.

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Finance

What Is The Right SIP Amount?

Thanks to the technological advancements in the mutual fund industry, starting a Systematic Investment Plan in any mutual fund scheme is just a few fingertips away. All an investor has to do is download a mutual fund app made available by the aggregator and choose from a wide range of schemes offered by various AMCs and fund houses, or they can even log on to the website of a particular AMC whose scheme they want to invest in and start a SIP immediately after completing a few pre-investment formalities.

But the real problem which many first time investors face is that they do not know how much the monthly SIP should be. To understand whether the monthly SIP amount that you will be investing is the accurate amount or an ad hoc amount you may have to first understand what is it that you want to achieve with these investments in the long run. Based on that you might be able to narrow it down to the right monthly SIP sum.

But what exactly is SIP?

A Systematic Investment Plan (SIP) is one of the easiest ways to invest in market linked schemes like equity mutual funds. Since equity funds expose the majority of their portfolio to equity markets, their performance keeps fluctuating from time to time. In such a scenario, a SIP makes more sense as investors do not have to time the market and can instead small, fixed sums regularly. However, SIPs are not limited to equity fund investments and are available for all types of mutual fund schemes.

How can SIPs help target financial goals?

Investors who exactly know what they want to achieve and by what time find it simpler to strategize the SIP investments. SIPs are best suited for those who wish to invest for a longer duration and want to accumulate a commendable corpus through systematic and disciplined investing. However, that does not mean that you cannot start a SIP for a goal that needs to be achieved in the next 12 months.  However, SIPs that carry on for longer durations allow investors to manage market volatility and give their investments to generate returns across various market cycles.

Now let us assume that you have two different goals, goal A needs to be achieved in 3 years and goal B needs to be achieved in 10 years. Goal A requires you to build a corpus of Rs 5 lacs whereas goal B requires you to build a corpus worth 15 lakhs. Let us assume the mutual fund scheme delivers an average of 8 percent returns.

To achieve goal A, you will have to start a monthly SIP of Rs 12,355 whereas to achieve goal B, a monthly SIP of Rs 8,199 should suffice. If you want to make such calculations to understand the SIPs that you must be starting on a monthly basis, you can take the help of the online SIP calculator. This is an easy-to-use tool that any individual can take help of to solutions to their investment woes.

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Finance

Things you need to know about hybrid funds or balanced funds

When it comes to mutual fund investing, investors are expected to keep a balanced investment portfolio by spreading their investments across asset classes. However, these days it is possible to gain the benefit of more than one asset class through a single mutual fund investment. Although equity and debt as an asset class have their own merits and demerits, by investing in a hybrid fund, you can get the best of both these asset classes.

What is a hybrid fund?

A hybrid fund (also referred to as a balanced fund at times), is a mutual fund scheme that spreads its investible corpus across equity and debt. Every hybrid scheme has a different portfolio composition of these asset classes depending on what the investment objective and risk profile of the fund is. For example, equity oriented hybrid schemes predominantly invest in equity related securities as opposed to debt oriented hybrid funds that invest a minimum of 65% to 80% in fixed income securities.

Things to know about hybrid schemes

Different types of hybrid schemes

If you are planning on investing in hybrid funds, it is essential for you to know all the different types of schemes available for investment so that you can consider choosing one that is ideal for their financial goals –

Conservative Hybrid Fund: A conservative hybrid fund is an open ended mutual fund scheme that invests a majority of its investible corpus in while debt.

Balanced Hybrid Fund: A balanced hybrid fund is an open ended scheme that must invest a minimum of 40% to 60% in each of the two asset classes (equity and debt).

Aggressive Hybrid Fund: Of its total assets, an aggressive hybrid fund must invest a minimum of 65% to 80% in equity and equity related instruments, and the remaining in debt.

Dynamic Asset Allocation Fund: This hybrid fund has the leeway to shift its investment portfolio dynamically between asset classes to suit the existing market conditions.

Multi Asset Allocation Fund: This is an open-ended hybrid scheme that invests a minimum of 10% in each of the three asset classes (typically equity, debt, and gold).

Arbitrage Fund: This fund tries to leverage arbitrage opportunities by investing a minimum of 65% of its total assets in equity and equity related instruments.

Equity Savings Fund: An equity savings fund is an open ended mutual fund that tries to generate returns by investing in equity, debt, and arbitrage opportunities

Offers true diversification

A hybrid fund is able to offer retail investors diversification like no other mutual fund scheme. Other schemes like equity and debt funds can offer diversification within the asset class, however hybrid funds invest across asset classes, thus balancing the investor’s portfolio across fluctuating market cycles. The equity component of the hybrid funds tries to take higher risks to take risk adjusted returns whereas the debt component tries to protect the portfolio from market volatility and otherwise generates stable returns.

Investors can start a SIP in hybrid funds

One of the easiest ways to invest small sums for a longer duration with hybrid funds is via a Systematic Investment Plan. SIP is a simple and effective way to ensure that you are able to save enough at regular intervals and eventually be able to build a solid corpus. SIPs are highly flexible in nature which means the investor can decide the monthly investment SIP sum and then continue to invest this amount in the hybrid fund every month on a fixed date. Investors who aren’t sure about how much they must be investing in for long term wealth creation can also use the SIP calculator, a free online tool that any layman can use.

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Finance

SIP calculator: How much you need to invest every month to accumulate Rs 5 crore in 15 years

Wealth creation over the long term is not a simple task. You have to ensure that you continue to invest till your investment objective is accomplished. Continuing an investment journey for 10 years or longer can become difficult especially because during this time life may throw unforeseen exigencies upon us and we might have to either quit midway or temporarily put our investments on hold. However, to ensure that you continue your investment journey by investing small sums at fixed intervals you can consider starting a Systematic Investment Plan in mutual funds.

What is a Systematic Investment Plan?

A Systematic Investment Plan or SIP is an easy and disciplined way to invest, especially if you have a long term investment horizon. This way of investing is known to bring in the discipline for someone who is new and isn’t sure about how to remain invested for longer durations. All an investor has to do is decide which mutual fund to invest in and then decide the monthly SIP sum. After this, the investor has to decide whether he wants to invest in mutual funds via SIP weekly, monthly, quarterly, biannually, or yearly. After this, they can either make the SIP investments manually or automate their transactions post which every month on a fixed date, the predetermined sum will be debited from the investor’s savings account and they can buy units depending on the current mutual fund NAV (net asset value).

When you are investing for a long duration it is obvious that you would want to know how much your investments can potentially fetch in the long run. To find that out, you can use the SIP calculator.

What is a SIP calculator?

The online SIP calculator is a free tool that any layman can use. There are two unique ways in which the SIP calculator works and hence can help investors simply financial planning and help them is creating a foolproof investment strategy. All an investor has to do is put in a few details and within no time the SIP calculator computes all the intricate calculations and comes up with close to real numbers. Yes, these are just accurate numbers since the SIP calculator does not take certain factors such as mutual fund expense ratio or exit load into consideration while computing results

I want to build a corpus of Rs 5 crores in 15 years. How can the SIP calculator help me?

The online SIP calculator is a time saving tool as it computes complex calculations in just a few seconds which an average human might take a very long time to calculate manually using a pen and paper. So if your goal is to build a corpus worth Rs 5 crores in the next 15 years, you can use the SIP calculator to determine how much you monthly SIP investments should be so that at the end of your time horizon you have accumulated the desired corpus.

In the SIP calculator, enter –

  • Total wealth you want to earn – Rs 5 crores
  • Time horizon – 15 years
  • Expected mutual fund rate of return (Let us assume 10%)

The SIP calculator will display the following results –

  • Monthly SIP investment amount needed – Rs 1.2 lakhs
  • Total invested sum – Rs 2.16 crores
  • Total wealth created – Rs. 5. 01 crores

Thus, if you wish to build a corpus of Rs 5 crores in 15 years then you will have to start a monthly SIP of Rs. 1.2 lakhs to achieve the financial goal.

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Finance

6 things to know about SIP

Introduction

SIP stands for Systematic Investment Plans. It is a kind of mutual fund which allows you to invest a specific amount, that is pre-planned, on a regular basis at different intervals. It is quite a convenient and flexible form of investment wherein you don’t have to spend any extra amount than whatever is specified. Let’s have a look at a few things that you should know about SIP.

  • SIP returns are taxable or not-

A majority of the investors choose SIP because it is considered a great tool to save taxes. However, it depends upon the type of your mutual fund and the period of redemption as well. If you invest in equity mutual funds, its returns have no tax on them if you redeem the investment after a year. On the other hand, debt mutual funds are taxable and the rate is 20 per cent along with indexation benefit if redeemed after 3 years of investment.

  • How to choose a SIP-

The choice of investment varies and depends upon your particular requirements. You can invest in small and mid cap mutual funds if you do not mind the market risks. If you can bear risks to some extent then you should opt for large cap mutual funds. On the other hand, if you are someone who cannot handle risks or have low risk tolerance then you should go for debt mutual funds. You can also use different online calculators to determine the numbers such as SIP with annual increase calculator will help you find out the yearly increase for your investment.

  • SIP is a safe tool-

SIP is a great investment tool that is very much safe as compared to other tools. When you invest in a SIP, you do not need to spend a hefty amount. You can start by investing small amounts every month. Taking into consideration the longer period of investment, the invested sum is generally the average of high and low. Thus, there is no chance of paying a high amount for mutual funds.

  • What is NAV in SIP-

NAV stands for net asset value. Since the amount of investment in SIP is pre-planned, investors buy more units when the net asset value is comparatively lower and vice versa. So, if the mutual fund NAV of any scheme is Rs. 10, you will have to pay the same amount to buy a unit of the scheme.

  • Save taxes-

If you invest in tax saving ELSS mutual funds via SIP, you will be able to claim tax deductions of up to Rs. 1.5 lakhs according to section 80C of the Income Tax Act. If you invest more than Rs. 1.5 lakhs, you will not get any additional tax-related benefits. This does not mean you cannot invest any further than the specified amount.

  • Lock-in period-

There is no lock-in period if you decide to invest in an open-ended mutual fund through SIP. However, there are a few mutual funds that have a lock-in period too. For instance, the lock-in period for ELSS mutual funds is e years. Any mutual fund that has a lock in period is known as a close ended mutual fund.

Conclusion

Systematic Investment Plans are one of the most popular forms of investment. Investors seem to like it very much because of all the features that it offers. There is less risk involved in this type of investment and you don’t need to invest a big amount to get started with it. This can be the perfect way of investment if you are someone who is just starting out.

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Finance

Tips & Tricks On How To Buy A House In Canada As A Non-Resident

When you are a non-resident in Canada, you will notice that it is difficult to buy property. If you have a house back in your country of origin, the chances are that you’re going to want to sell it and invest in Canada instead. It may be a good idea for this reason to keep both properties, but you still need to know how non-residents can buy a property in Canada.

Who is a Non-Resident?

A person is considered a non-resident if they do not meet any of the residency tests that the Canada Revenue Agency sets out. Therefore, you will be regarded as a non-resident under the following circumstances:

1) You lived outside of Canada throughout the tax year (365 days)

2) You stayed in Canada for less than 183 days in the tax year

Buying a house in Canada means that there are some hoops you’ll need to jump through as a non-resident. The key here is understanding what is required of you and doing your due diligence before offering a property.

The following are three tips that will help you buy a house in Canada as a non-resident:

1) Get A Mortgage Pre Approval

The first step you should take is to get pre-approved for a mortgage or home equity loan, and it is advisable to work with private mortgage lenders in BC. It will require that you provide some information about your employment and finances. Still, it can help with your negotiations when determining what price you are willing to pay on the property.

If you are pre-approved for a certain amount, this helps establish what market you are in and gives you some leverage when negotiating the purchase price.

2) Understand The Rules Governing Non-Residents

It is essential to understand the rules that govern non-residents purchasing property in Canada; private lenders in BC will help you know that. For example, a non-resident can only own a property for a maximum of two years without becoming a resident.

Other stipulations may apply, so it is vital to be aware of them and ensure that you meet all the requirements.

3) Have A Local Agent Represent You

When buying a property as a non-resident, it is vital to have a local agent represent you, such as B lenders. They are familiar with all the rules and regulations that pertain to the purchase, and they can help ensure that the process goes as smoothly as possible.

Having an agent represent you also helps with communication, as they can act as a middleman between you and the seller. It can be beneficial if you cannot be in Canada during the purchase process.

There are numerous benefits of working with private lenders when purchasing a property. They will guide you through the process and ensure that everything is taken care of on your behalf. Understanding what needs to be done and having them help you ensure that absolutely no mistakes are made along the way is essential.

As a non-resident, it can be hard enough to try to buy property in Canada, but it can be done with a bit of preparation and understanding of the process. By following the tips outlined above, you’ll be on your way to owning your dream home in no time.

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FinanceLoan

The True Reason for Using a Home Loan Calculator & How it Ameliorates Your Process – Revealed!

Buying a house is a major sign of achievement, and with it comes a sense of immense pride. However, affording one is not easy at all. Going by the current real estate market, it is almost impossible to afford a house without the help of a home loan. While a home loan does provide the required financial assistance, there are many people who are worried about applying for such loans. The reason for this is that they believe repaying the loan will not be easy.

While this is a valid concern considering a home loan is most probably going to be the biggest liability that they take on, it is not something that cannot be managed. This is where a home loan EMI calculator steps in to help manage the loan EMI payments.

This calculator is an online tool that anyone can use for no cost at all. It is usually made available on most financial institutions’ official websites. Here is why it is important to use one before you apply for home loan:

  • The calculator helps maintain financial stability

After using the home loan EMI calculator, you get familiarised with the monthly instalments of the loan right from the beginning. This helps in being aware of whether the loan plan is affordable and a good option to go for. Since you opt for the loan plan only after taking a look at the EMIs, you are in a good financial position to start saving for the loan.

  • It helps in picking the right loan amount and tenure

The calculator lets you try out different variations. This means that it is possible to change the numbers in the loan amount and tenure to look at different EMI options. This way, you can find the right loan amount as well as a suitable tenure to repay the loan.

  • It gives accurate results in no time

Before these online calculators, the only way of finding out the housing loan’s monthly instalments was through manual calculation. However, this was error-prone and could cause major problems at the time of repaying the loan. Thanks to the EMI calculator, it is now possible to get accurate EMI results that you can rely on.

  • It is very simple to operate

The manual calculation of home loan EMIs was not just prone to human errors but was also quite time-consuming. After these EMI calculators were made available, they made life much easier for an applicant looking to borrow a housing loan. Now, all you need to find out about the monthly instalments of the loan is to just fill up details regarding the loan amount, interest rate, and repayment tenure. The calculator will then display the EMI results.

Now that you know the value of an EMI calculator, make sure to use it before you apply for home loan. This will help in ensuring that the repayment of the housing loan is smooth and hassle-free.

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Finance

Things to know about Equity Investment

Young investors who can take higher risks to generate risk-adjusted returns often prefer investing in equity mutual funds rather than investing in direct equities. There are several benefits of investing in equity mutual funds rather than investing directly in the stock market. Let us find out a few things about equity mutual funds that might help you make an informed investment decision.

What are equity funds?

Mutual funds can be largely categorized as equity and debt schemes. While debt schemes are more focused on generating stable income by investing in fixed income securities and debt related money market instruments, equity funds are those mutual funds that invest in stocks of companies across market capitalization to generate long term capital appreciation.

How are equity funds categorized?

Equity mutual funds can either be categorized based on the market capitalization in or depending on the sector or theme. Equity funds like large cap, mid cap, small cap, multi-cap, and flexi cap. A large cap fund predominantly invests in stocks of large cap companies that are financially stable. Mid cap funds invest in mid cap company stocks. Small cap funds invest in stocks of companies with a market capitalization of less than Rs 500 crores. Flexi cap funds must invest a minimum of 65% of their total assets in large, mid, and small cap stocks. Multicap funds must invest a minimum of 25% each in large, mid, and small cap markets. Thematic and sectoral funds are those equity funds that target only those companies belonging to a particular sector or theme like pharma, crude oil, information technology, etc. Then there is the ELSS or Equity Linked Savings Scheme, a tax saving scheme that invests across the market cap. Investors can save tax every fiscal year by investing up to Rs 150000 in ELSS.

How to invest in equity funds?

There are multiple ways in which one can invest in equity funds. Investors can either directly reach out to the AMC and fill the form manually, become KYC compliant and then invest. This is the offline and traditional way of investing in equity funds. Another way to invest is by visiting the AMCs website and buying mutual funds online. Investors can also invest in mutual funds through their mobile banking app or through an app made available by the AMC or any third party aggregator. However, investors must directly get in touch with the AMC or the mutual fund broker to understand all the pre-investment formalities to commence their equity mutual fund investing journey.

What are the different investment plans made available?

Retail investors can either make a one-time lumpsum investment right at the beginning of their investment cycle, or they can consider starting a monthly SIP in any equity scheme of their choice. Systematic Investment Plan or SIP is an investment tool that allows investors to save and invest a fixed sum periodically in mutual funds. Investors can decide the SIP sum and then continue to invest that sum in the equity scheme till their investment objective is accomplished. To determine the exact sum one must invest in equity funds so that they can target their life’s financial goals, investors can use an online SIP calculator, an easy-to-use tool freely available online.

Can anyone invest in equity funds?

Although it is possible for almost anyone above the age of 18 years to invest in equity funds, investors must understand their risk tolerance before investing. Equity funds do not guarantee capital appreciation and can even generate negative returns in the short run. Hence, investors with a very high risk appetite and a long term investment horizon may consider adding equity funds to their investment portfolio.

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Finance

What is Multicap Fund? How it works

Mutual funds have become an important investment tool, thanks to a lot of initiatives and investor awareness campaigns carried out by AMFI (Association of Mutual Funds in India) and other Asset Management Companies. One of the best ways to mitigate risk and earn long term capital appreciation is by investing in market linked schemes like equity mutual funds.

 Equity mutual funds can be categorized as on the market capitalization they target to pick stocks and form their portfolio. While schemes like large cap, small cap, and mid cap invest predominantly, in large, small, and mid cap stocks respectively to generate capital appreciation, schemes like flexi cap funds and multi cap funds invest across market capitalization. Today we are going to discuss multi cap funds, how they are different from flexi cap funds and how these funds work.

 

What are multi cap funds?

Multi cap funds are open ended equity schemes that invest in large cap, mid cap, and small cap stocks to build a portfolio of stocks that have the potential to generate capital appreciation over the long run. As per market regulator SEBI (Securities and Exchange Board of India) guidelines, of its total assets, a multi cap fund must invest a minimum of 25 percent each in small cap, mid cap, and large stocks. The manager may choose to invest the remaining of the assets in debt or other equity related instruments based on the nature and investment objective of the scheme.

 

How do multi cap funds work?

As mentioned earlier, multi cap funds invest the majority of their investible corpus across the market cap. The fund manager tries to generate capital appreciation by building a portfolio of credible stocks belonging to large cap, mid cap as well as small cap companies. The fund tries to balance its overall portfolio by giving itself stability through bluechip stocks. The small cap and mid cap components of multi cap funds try to generate risk-adjusted returns.

 

What are the different investment plans to invest in multi cap funds?

There are two ways in which retail investors can consider investing in multi cap funds – they can either make a one-time lumpsum investment right at the beginning of their investment cycle or they can consider opting for the Systematic Investment Plan. Those who have surplus capital that is sitting ideal may consider making a lumpsum investment. However, most young, as well as seasoned investors these days, are considering SIP over lumpsum. Systematic Investment Plan (SIP) is a simple and effective way to save and invest a fixed sum regularly in mutual fund schemes like multi cap funds.

The greatest advantage of starting a monthly SIP is that investors can invest the minimum investment sum stated in the multi cap fund’s SID (Scheme Information Document). This minimum investment sum can be anywhere between Rs 500 to Rs 1000. Yes, by investing such a small every month investors can invest in multi cap funds. Also, depending on how the scheme performs they may choose to increase their investment sum so that they are able to increase their corpus in the long run. Investors can even use an online SIP calculator to compute the total estimated returns which the multi cap scheme may be able to offer if they continue to invest in it via SIP for a certain duration. The two biggest advantages of SIPs are the power of compounding and rupee cost averaging. To add to that, investors can stop their SIP investments at any given time and do not have to pay any fine or penalty for doing so.

Investors must consult their financial advisor before investing in any market linked scheme.

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