5 reasons why you should start an SIP right away

Investing in mutual funds can build your wealth at a much better rate than investing in other options (such as Gold, Deposits etc.) in the long term. If you’re interested but hesitant on investing, it’s best to start with a Mutual Fund SIP and is generally recommended for the following reasons

• 1. Simple and disciplined approach towards investment

The philosophy behind SIP is to go on investing regardless of the market conditions. Investing small amounts regularly doesn’t pinch your pocket. Also, it is hassle free as it follows the monthly salary cycle.



• 2. Take advantage of the power of compounding.

Say you've invested Rs. 10,000 @10% per year. You will make Rs.1, 000 in the first year, Rs. 1,100 in the second and Rs.2,358 in the tenth year. The money you make goes back to work to make you even more money than before.



• 3. Timing the market is not necessary.

There is a belief that “when” you buy and sell is crucial to succeed in the stock market. But the impact of market fluctuations reduces since you will be investing regularly over a long period of time. And therefore, there’s no need to ‘time the market’.

• 4. Save upto Rs 46000 with ELSS SIP.

Equity linked savings scheme or ELSS have emerged as the best tax saver instruments recently. You can claim upto Rs 1.5 Lacs under tax exemption. Go for an ELSS SIP and be smart about saving on tax rather than scrabbling last minute.



• 5. Start Small but start early

One of the biggest roadblocks for beginner investor is saving up a sizable amount to start. With SIP, you can start with as low as Rs 500 a month. The trick here is to start at the earliest so it gets enough time to grow.

If you simply want an investment plan to build wealth at a decent rate, start now and stay invested for a long term is all that an SIP scheme asks of you.

Disclaimer: This article has been authored by Dialogbox, a Mumbai based Content Design firm known for offering unbiased and honest opinion on investing. Axis bank doesn't influence any views of the author in any way. Axis Bank & Dialogbox shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.