Some of the benefits of investing in SIPs are as follows:
- Become a disciplined investor : A SIP investment would make you more disciplined in matters of managing your finances. With the option of automated payments, it means you don’t have to remember every month.
- Convenience : You can invest in a disciplined and phased manner using SIPs. It allows you the
convenience of starting your investment with as low as Rs. 100.
- Cost Averaging : With SIPs, there is no need to time the market. You buy
shares when prices are low and also when prices are high. This reduces your average cost of
investment over time.
- Power of Compounding : The basic principle of compound interest implies that small amounts
invested over a long period of time would result in a larger return compared to a one-time
investment.