What Is SIP ??

SIP means Systematic Investment Plan.

History of Founding....

Systematic Investment Plan or SIP introduce in 1993 in India. 

Whereas mutual Fund Starts in India in 1963(first phase) with formation of UTI in 1963 by an Act of Parliament and functioned under the Regulatory and administrative control of the Reserve Bank of India (RBI).

SBI mutual fund was first non UTI mutual fund established in June 1987.

Followed by can bank in Dec 1987.

Panjab national Bank mutual fund Aug 1989 and other also participated followed.

HOW SIP WORKS.....

SIP is a method of investing a fixed sum, regularly, in a mutual fund scheme. 

SIP allows one to buy units on a given date each month. The amount is invested at the closing Net Asset Value (NAV) of the date of realization of the cheque.

Nowadays Systematic Investment fund is safe for everyone who want achieve there Goals or Wish in small amount of investment with good returns with small risk. Lets assume, If someone planning to save every month 5000 rs for 5 years they will get expected returns rate 10%  will get 3,90,412 on maturity.

3,00,000 - invested Amount

90,412 - Est. Returns 

A medium class people can also achieve there goals to save minimum amount they want.

SIP also have risk depend on market condition you have to stay humble for minimum 1 years for good returns. The mutual fund are market instruments they invest in stocks, bonds, commodities, etc. The amount depends on many factors: type of fund, nature of market decline, etc. 

Difference between FD and SIP....

Fixed deposit is the instruments that will give fixed income on fixed period and SIP is depends on market condition but if you planning for long term goals SIP will give you batter returns than FD.

Take Care, Happy Banking.