Accelerate Your Financial Growth With SIP

We all have one common desire, i.e., ‘to become financially strong.’ But only thinking about it will not fulfil it; we will have to work hard for achieving the same. So, before moving towards it, we need to know what can help us to reach there, so as to make the path easier. Everyone is aware that only money has the power of creating monies. Hence, the savings that we owe are the sources of reaching the financial goals and SIP is the route for the same.

What is SIP?

The SIP, which stands for the Systematic Investment Plan, is a way of investing in the mutual fund schemes. Under this, one is required to put the amount of money at regular intervals which is automatically debited from the bank accounts and put into various investment schemes. It possesses a bundle of benefits, and provides the following advantages to an investor:

    1. Small Amount of Payment: One can start putting his money into diversified projects with just Rs. 500 or Rs. 1000, via SIP, which does not cause burden.
    1. Periodic Remittance: As per the nature of SIP and its functioning, it requires the amount to be payable on a recurrent basis say monthly and thus, helps the investor to plan his per month expenditure accordingly.
    1. Debits the Money Automatically: Once the investor is enrolled with the AMC to invest in the SIP, s(he) associates his/her bank account with the same and the amount of investment money is debited from there accordingly in a hassle-free manner.
    1. The Power of Compounding: In investment, we receive the interest on some specific rate. It may be a simple or a compound interest rate. In SIP, investments fetch the return on the compound basis. According to which, the interest earned on the principle amount also realises yield, i.e., ‘interest on interest’. For example, you invest Rs. 20000 @ 10% simple interest for 5 years. At the date of maturity, you will receive an amount equal to Rs. 30000. While, in the case of compound interest, the value of the investment on the due date shall be, Rs. 32210.20. Accordingly, it is more beneficial for the investor.
  1. Rupee-Cost Averaging: Every scheme under the SIP has a net asset value(NAV), which is basically the unit price of that scheme, on the basis of which the units are allotted to the investor. Lower NAV means more units and vice versa. As it keeps changing regularly, every time the money of the investor is put into the plan, s(he) gets a different number of units. Thus, the average cost of investment reduces. Hence, the investment in SIP is low-cost in comparison with others.

Apart from the above major benefits, SIP also provides the following:

  • Flexibility
  • Convenience
  • Tax Savings
  • Diversification
  • Wide Selection

Accordingly, if one is desirous of achieving the financial growth and experience the riches, the SIP(Systematic Investment Plan) is one of the best choices to make. It is capable of fulfilling every investor’s requirement and is beneficial for all.

In the study of economics, we come to know about the power of savings and its relationship with the investments. For the growth of the economy of a country, investment plays a crucial role which leads to the overall development of its citizens. Hence, we can conclude here that by investing our savings in the SIP mutual fund schemes, we can achieve our objective of experiencing the financial freedom.

The Success or Failure of Any SIP Plan Is in Your Hands

Investing in SIP is a very crucial task and should be followed by thorough research and analysis of every possible aspect. It is observed that if the clients are not able to get the desired output from an SIP plan, then they tend to find fault in the scheme. But, various other factors are affecting the growth and return percentage of any scheme. So, one can conclude that the triumph or failure of any of a Systematic Investment Plan depends on an investor in the first place. Clients in their haste, take investing decisions which not only make them suffer a financial loss, but demotivates them to deal further with mutual funds.

What does an SIP actually mean?

Before jumping directly to the errors, we must understand the meaning of SIP plans. In financial terms, SIPs can be termed as a method to invest in any of the mutual fund schemes by following a regular investment pattern. In layman terms, an SIP plan is an investment method which allows the clients to develop a continuous process of investing in mutual funds.

Analyzing the reasons for failure: A single factor cannot be held responsible for the failure of any scheme. There is an array of reasons which makes the clients suffer a loss in their SIP investments. The clients need to be very careful while picking up an SIP scheme and then maintaining it. Here are some following eye-opening points which would revamp your investing principles.

Investing through SIP for a short-term: Clients often take SIP investments to be equivalent to the stock market investments. So, they try to find the correct time to invest in mutual fund through SIP and redeem that investment soon. It is true that mutual funds are taken to be a proxy for the stock market, but unlike the equities, mutual fund schemes require time to show the required returns for the investments. SIP investment is a step by step process which allows the clients to follow a consistent investment strategy. However, it must be adopted for a longer duration to get the maximum returns from it.

Every SIP plan has an objective: A Systematic Investment Plan proves to be a common way through which any client can invest in a mutual fund scheme. But, each scheme has a different objective and has been launched into the market to serve some purpose. Even if an AMC launches two SIP schemes under one category, they will differ in their objectives. One might be a large-cap fund while others may deal with the diversified equity. This implies that the clients first should understand the aims of the schemes and then decide whether or not to invest in that particular scheme. If the investors put their money in a plan randomly without knowing its fundamentals, then they might have to bear a loss.

Quick returns are a far cry: SIP investment is not for the clients who want to have immediate returns from their investments. Expecting SIP schemes to deliver returns over a short period will undoubtedly lead the clients towards dissatisfaction. SIPs are undoubtedly very great plans for investing in mutual funds. However, they might allow the clients to invest in short-term schemes like liquid funds. The returns from such investments are also subtle. To attain copious returns, the clients need to keep their perspective wide and maintain their investment for quite a long spell of time.

Each investor has different needs: When we are with our friends, we discuss a lot of things from weather to trending fashion and career to investment. During those chit-chat sessions, we often discover that some of our friends have earned copious returns from their investments. And then without giving it thought, we tend to pick that scheme for deploying our money. Although those SIP plans might have proved to be a turning point in the investment cycle of our friends, it does not mean that it will benefit us too. The reason being the difference between every individual investor’s needs for investing. A particular SIP plan might prove to be beneficial for your friend as it may coincide with his/her wants. But, the same scheme might not turn out to be beneficial for you as your expectations may be different. Thus, one must identify their requirements and then invest in a SIP scheme.

Thus, by paying heed to the points mentioned above, clients can reach the heights of SIP investment that too without much efforts.

The author is a learned professional investment expert. She has been dealing with companies like Birla Sunlife Mutual Fund sine a long time. Her article have enticed the clients towards following the path of mutual fund investing through SIP plans rather than directly saving.

Achieve Your Investment Goals With a Mutual Fund Programme

Whenever we think of putting our money into any investment project, we first make sure that the project is proficient enough to provide maximum returns. Losing the hard-earned money is never acceptable, and this is the reason we sometimes hesitate to make investments. But, this is not the solution.

Investments have the capability of changing our future and creating a fortune. Then why there is a need to skip the idea because of some doubts in mind? Instead, we should think about such alternatives which can promise the desiring results. The mutual fund is one of the best alternatives in this regard.

What is the major risk associated with an investment project? The only answer is the market volatility, which affects the returns on our investments. And, the mutual fund has the best solution for the same. It is a programme in which the fund manager pools the monies of many investors and puts them into diversified investment schemes to reduce the associated risk. One can opt for mutual funds to fetch many benefits which involve the following:

    1. Diversification: The most important feature that differentiates it from others is its nature of diversification. The monies of investors are allocated into various assets in a way that it reduces the exposure of risk to any one asset or scheme. As not all plans shall suffer downfall simultaneously, thus by putting money into various plans, it aims to diversify the risk factors.
    1. Maximisation of returns: As the funds are put into varied investments, it provides maximum possible returns to the investors. So, one can fulfil his/her investment goals by putting money in the mutual funds.
    1. Liquidity: It consists of various open-ended schemes, which are liquid in nature and provide easy cash convertibility to the investors. Thus, one can easily redeem his funds as and when required and realise the money.
    1. Flexibility: Money helps a person to face the hard times with ease, and this is the reason, s(he) never wants to indulge in a rigid investment structure. But, the schemes designed hereunder do not have a lock-in period. Thus, an investor can choose to exit from it whenever required with the help of the redemption process.
    1. Professional Management of Funds: The money that we invest in the schemes is handled by the fund managers who are professionally trained and highly experienced. Thus, we can make sure that our monies are administered with expertise.
    1. Tax Savings: An investor suffers from the burden of paying a huge amount of taxes to the government. There are various schemes under mutual fund programme which offer tax benefits under section 80C of Income Tax Act. Thus, one can save the tax amount as well.
    1. Different Ways to Invest: An investor can put money into the investment schemes by making payment in ‘Lump Sum’ or by using the ‘Systematic Investment Plan’, in which investment amount is payable in easy instalments.
    1. Different Modes of Investing: Investors can put their monies into mutual funds by using any one out of the ‘online’ or the ‘offline’ modes, as per their feasibility and convenience.
    1. Well-Regulated: There are a large number of asset management companies which are registered with the Securities and Exchange Board of India. They manage the funds of mutual fund programme and accordingly, assure proper regulation of the money.
  1. Contribution Towards Economic Growth: It provides great benefit to the economy by investing the funds in various sectors of the country. Thus, an individual investor can also contribute to creating wealth for the country.

Consequently, an investor can fetch the maximum benefits from his/her investment by putting the monies into mutual fund programme and reach the goals of investment. To counter the volatility and earn good returns, it is the smart approach towards making an investment.

5 Reasons to Use a SIP Calculator for Better Investments

While planning an investment in mutual fund programme, one desires to know the exact value of the invested capital and for that using an SIP Calculator is the best alternative.

As one needs to opt for an avenue which provides higher returns, the Systematic Investment Plan offers the feasibility of investing in the best investment strategy by making payment of small amount on a periodic basis. Moreover, SIP Calculator helps in computing the accurate value of investments after a certain interval of time. It helps in taking the apt decision to earn desired yields. The mutual fund return calculator provides various benefits and here are some of the reasons due to which it is preferred the most:

  1. It Calculates the Accurate Worth of Investment: It is helpful in conceiving the values that shall be generated by a mutual fund SIP at the time of maturity. One can maintain the accuracy only after considering its every aspect. The SIP calculator is designed after contemplating all the important parameters which include the Net Present Value, Internal Rate of Return, and Inflation Rate. In this way, it helps in generating the exact values of the invested amount.
  2. It Ascertains the Monthly Payable Amount: Sometimes it becomes quite difficult to decide the amount which should be invested so as to earn the desired returns in the future. The SIP Calculator helps to determine the exact sum of money that one needs to put in the mutual fund every month in order to meet the financial goals. Accordingly, it assists in making an efficient plan for achieving the investment objectives.
  3. It is Easily Accessible by All: All the investors who lack proper knowledge of finance-related terminologies and calculations can also use this tool for making an effective plan. It provides a user-friendly interface which can be used even by a layman. One needs to fill in a few fields like monthly amount payable, the tenure of investment, expected rate of return, etc., using which it generates the exact worth of the invested amount.
  4. It is Feasible for Every Type of Investment: It does not matter whether you are making an online or offline investment in the mutual fund, the SIP planner can be used in both the cases. It can help every investor in taking an independent decision as per his/her approach and evaluation.
  5. It Accelerates the Planning Process: As the mutual fund return calculator computes the definite returns on investment, it helps to make the planning process effective. One need not waste the time on doing research and analysis. Instead, by calculating the returns and making comparisons, one can take the best decision. After all, yielding higher returns is one of the main reasons of investing.

Accordingly, the SIP Calculator acts as an effective planner and can guide you in the best possible manner to take the correct decision regarding SIP investment. You can use this device and build a productive strategy for your future. Furthermore, the benefits that it offers would assure aspiring returns and would be helpful in making a worthwhile investment to attain financial gains in the future.

6 Smart Tips to Select the Best Mutual Funds

If you are planning to make a mutual fund investment, then the alternatives may appear daunting in the beginning, but if you take into consideration some specific parameters, you would be able to invest in a worthwhile investment programme. A mutual fund is undoubtedly the most effective source to create long-term wealth, and hence, one must take due care before putting the funds in its schemes. Moreover, one should select the best mutual funds for one’s portfolio to gain maximum benefits in the future.

Many of us face difficulty in choosing the right investment plan and thus end up taking a wrong or inadequate decision. Therefore, it is quite essential to do in-depth market research and analyse various parameters prior to investing. But before we go for research, we must know about the different factors which we need to study and analyse. Here are some of the major elements one must contemplate while taking an investment decision in the mutual funds:

Tip #1: Know Your Goals

Different investors have divergent investment goals which are either short term or long term in nature. So at first, every investor must know why he/she wants to invest in a mutual fund. A set target helps one in opting for the most suitable investment strategy. Furthermore, when you know your goals and risk appetite, you take the right decision at the right time which leads to greater benefits and higher returns in the future. According to the set objectives, you may choose the best mutual funds which either fall under the equity, debt or hybrid funds category.

Tip #2: Evaluate Various Fund Houses

Once you are done with setting up your investment goal, next you need to evaluate the asset management companies (AMCs) which provide the top-performing mutual fund programmes. There are a large number of fund houses which are indulged in the process of designing the best mutual funds for the investors on the basis of market analysis in order to cater to their needs. While investing in these programmes, we give a mandate to the fund houses to manage our money on our behalf and invest the same in the most efficient plan. Hence it is quite essential to get an insight of the AMC before handling the money to them.

Tip #3: Have a Look on the Funds’ Performances

Every investor has a common objective which he/she desires to achieve from the investment, i.e., returns. Accordingly, one must know the capacity of the scheme to yield desirable profits in the considerable time period. Although past performance cannot determine the future returns of a scheme, it gives a gross idea about the capability of offering higher profits. Once you analyse the track record, you feel confident about investing your hard-earned money in them.

Tip #4: Consider the Loads & Other Expenses

To take a remarkable investment decision, one must check all the relevant parameters that may affect it, wherein cost is one of the major concerns. There are different loads associated with the mutual fund investments as well, which need to be considered before investing. One must evaluate the same and confirm that they are affordable and worth making. The exit or entry loads may increase the overall cost of investment which causes a negative impact on the future value of invested capital as well.

Tip #5: Assess Diversification of the Fund

It is always suggested to put the money into divergent schemes to reduce the risk exposure. One must make sure that his/her invested money is fully diversified to offer maximum returns with minimised risk. The best mutual funds also consider the same thing and make wide diversification of the investors’ capital. One can invest the capital in such programmes to yield aspiring profits for a financially stable future.

Tip #6: Remain a Consistent Investor

It is always easy to invest in funds but it is tough to keep going. However, one must remember that to earn fruitful returns from the best mutual funds, one needs to stay regular. For that, the Systematic Investment Plan (SIP) is the most apt alternative as it provides a convenient method for being a disciplined investor by making small amount payment on a recurrent basis. With this, one shall be consistent in investing and gain substantial returns thereof.

Bottom Line:

Investment decisions are crucial and must be taken with efficiency. The top mutual funds yield highest profits and hence, must be opted by every investor for his/her portfolio. The factors mentioned above shall help you in opting for the best mutual funds to make a worthwhile.

How ELSS Overcomes All the Other Tax-Saving Instruments

Paying taxes is sometimes considered as a burden as one has to pay them just because one earns a good sum of income. Most of the citizens of the country do not find taxes viable, and that is why they even try to evade them. But why should we get into illegality when we have the option to save taxes legitimately? Yes, you heard that right as Section 80C of the Income Tax Act, 1961, provides the tax deduction on the total taxable income up to an amount equal to Rs.1.5 lakh in a financial year. Among the various financial instruments, ELSS is one of the categories of equity mutual funds which offers such benefit. Accordingly, one can reduce the taxes up to Rs. 46,350 in a year by investing in the top ELSS funds. So, you don’t need to opt for tax evasion, instead, make an investment in the best tax-saving securities to avail deductions on your income.

There are several instruments which provide the 80C deduction to the investors in India which include Fixed Deposits (FDs), Public Provident Fund (PPF), National Pension Scheme (NPS), LIC Policy, and so on. All of these have several benefits, but the best among them are the ‘ELSS Mutual Funds’. By providing multiple advantages to the investors, they help one in gaining capital appreciation along with tax savings. Here you will find the features of ELSS funds which set them apart from others.

  1. Least Lock-In Period – In the case of Equity Linked Savings Scheme (ELSS), the lock-in tenure is the least as compared to the other tax-saving instruments. One needs to stay invested only for three years in the ELSS schemes to avail the benefits and can redeem the funds immediately once the stipulated time expires.
  2. Tax Advantage – As per section 80C of the Income Tax Act, the investors who park their money in the ELSS can avail the tax deduction up to Rs.1.5 lakh in a financial year on the total taxable income. With this, you would be able to reduce the tax burden to a great extent.
  3. Capital Appreciation – By investing the funds in the equity stocks and securities, the ELSS mutual fund schemes offer the opportunity of fetching capital growth over a longer tenure. As the minimum investment tenure in this category is three years, the invested money gets enough chance to make higher profits in the market. Moreover, the fund managers also get sufficient time to rebalance the portfolio of the investors as per the requirement.
  4. Tax-Free Returns – The investments made in the best ELSS funds provide the benefit of tax-free returns as well. The interest or dividend earned on the securities are not taxable in the hands of the investors. Furthermore, the capital gain fetched at the time of selling the funds is completely tax-free. Thus, investors need not pay taxes on the income from such investments.
  5. Investment with a Small Amount – The minimum investment amount in the case of ‘Equity Linked Savings Scheme’ is just Rs.500. Henceforth, one can start investing with such a small amount to avail the benefits. The SIP plan in ELSS makes it more convenient for the investors to indulge in secure investments on a regular basis and avail tax deductions at the end of the financial year. With this, one can achieve the long-term financial goals as well as reduce the tax liability at the same time.
  6. No Limit for Maximum Investment – There is no limit for the investors to make a maximum investment in the ELSS funds as in the case of PPF. You can invest as much as you want to gain the advantage of the equity portfolio and earn riches over the course of time.

Hence, it is undoubtedly safe to say that ELSS mutual funds hold an important position among all the tax-saving instruments under section 80C. The investors desirous of gaining the twin benefits of tax savings and capital growth must park their funds in these plans.

Know Your Rights & Duties As a Mutual Fund Investor

Being an investor of mutual funds, everyone is well aware of the fundamentals, process, and all other factors which they should know. But, are you sure you have enough information regarding the funds in which you intend to invest? Well, you must be.

It is a general behaviour of every investor that they never worry about the facts they don’t know until they realise the implications of not knowing them. However, it is not right. While registering with any online portal, we come to the terms and conditions to confirm that we adhere to them and intend to get associated with them knowing all the facts and figures. But do we read them in actuality? Many of us don’t. The reason being is that we believe it is a common practice and there won’t be much impact of such T&Cs in our lives. Holding such a casual behaviour is sometimes fine, but in the case of mutual fund investments it may end up with various complications. Thus, it is quite essential for every investor to perform the duties and exercise the rights thoroughly in order to persuade a better investment.

The regulatory authorities in every country have set up certain guidelines for the mutual fund industry. We must adhere to them and follow the rules to make the best decision. All the Asset Management Companies (AMC) which design and manage the mutual fund programmes are obliged to disclose all the scheme related documents to the investors so that they can come to know about every vital detail about the fund in which they intend to invest. Investors too have certain duties to perform and different rights whenever they take an investment decision. They include:

Analyse the Offer Documents

The scheme related documents which include the SID, KIM, and SAI must be read thoroughly before buying the funds. They provide every single detail of the scheme including its nature, type, assets, portfolio, and instruments. With this, one can come to know about the fund’s capacity to generate the required returns.

Get Annual Reports, Statements & Periodic Updates

It is the right as well as duty of every investor to get annual reports and declarations from the AMCs. Moreover, there might be some other updates in the mutual fund houses which every AMC must inform to the investors.

Receive Dividends Within Time

Suppose you are an investor in SBI Mutual Funds and hold equity funds having dividend investment plan. Then you have the right to receive the dividend payments within time after the declaration. This means, once the AMCs declare the dividends, investors have the right to get his/her share within time.

Get Updates of Changes in Schemes

The fund managers of the AMCs keep changing the funds’ portfolio in order to grab the best opportunity and offer better yields. The investors have the right to receive information or updates regarding the changes made in the scheme so that they can take adequate steps in this regard whenever required.

Complaint Redressal System

Every fund house has a complaint redressal mechanism which is focused on addressing investors’ problems. Whenever you have a complaint, you can approach the grievance redressal department of the AMC to get instant solution.

Details About Distributor’s Commission

All the investors have the right to know the amount of money or the commission that is paid to the mutual fund distributor by the fund house. Moreover, it is the duty of the distributor to tell the investor about the commissions or remunerations that they receive by selling other competing schemes.

Awareness about the rights and duties of the investors brings transparency in the fund management system. A well-regulated scheme has distinct advantages which help the investors in gaining superior benefits. With this, the investors get a clear view of their investments and the possibility of return generation increases. So you must be aware of all the updates related to the fund in which either you have investments, or you intend to invest your hard-earned money.

The author has a keen interest in writing various articles on mutual fund investments and SIP plans. He provides online investing services to the mutual fund investors. His earlier writings for SBI Mutual Fund and various categories were helpful for the investors.

How to Make the Best Use of a Tax Calculator?

Are you confused about your total tax liability? Do you want to calculate the exact sum of money you owe to the taxman? If yes, then the tax calculator is the best tool for you. Although the financial advisors and tax consultants claim to provide the perfect solution for tax savings in a particular year, the online tax calculator has left them behind.

Tax calculation is not a simple task at all as we have to consider various elements for making the exact calculations to compute the taxes payable to the Income Tax Department. While filing the tax returns, it becomes quite essential to follow each step accurately so as to be sure that every component is considered. The tax calculator is one of the necessities for an individual assessee as it assists him/her in computing the absolute values. Do you know how you can make the most of such an amazing tool? Let’s evaluate.

Reasons to Opt for Tax Calculators

  • Simple Calculations:- The tax planning calculator available online in India is easy-to-use even for a layman. One is required to fill in the specifications, and it generates the exact sum.
  • Recommendations for Investments:- There are some tax calculators in India which provide the suggestions for better investments. As we know that Section 80C of the Income Tax Act provides tax deduction up to Rs.1.5 lakh, the tax planning tools recommend the plans through which one can avail such deduction.
  • Tax Planning Made Easy:- Tax planning in India is a haphazard task as there are several parameters which are required to be kept in mind. These online tax calculators simplify such activities by providing the best solutions.

Different Elements for Tax Computation

The tax calculations are complicated due to the problems involved in the assessments. Thus, one needs to use the best tax calculators in India so that the exact values for return filing can be generated. The online tax planning calculator uses the following components to measure the exact values:

  1. Type of Assessee – The first thing that one needs to mention in the calculator is the type of person one is. Out of the different classes of assessees, viz., individual, HUF, company, BOI, etc., it is a must to mention in which category one falls. Moreover, in the case of an individual, it is requested to specify his/her age group so that the calculations are made as per the correct slab rates.
  2. Residential Status – It is a further necessity for the assessee to specify the residential status. The reason being is that Income Tax Act has different rules and requirements for Resident, Non-Resident Individuals (NRIs), and Resident & Not Ordinarily Residents (RNOR).
  3. Gross Annual Income – Once the type of assessee and the residential status is decided, one is requested to specify the annual income on which payable taxes are computed. It is the gross annual income which is earned by the assessee in the particular financial year. It is that sum on which different adjustments are made, and one claims deductions to compute the net taxable income.
  4. Deductions Claimed – The online tax calculator also asks for the deductions which are claimed under different sections of the Act, say 80C, 80D, etc. This amount is deductible to compute the net taxable income after going through the appropriate adjustments to fetch the correct tax liability for the current financial year.

Hence, by evaluating the exact sum of the amount payable to the taxman, one can do the best tax planning in India for any financial year. The tax calculator is the best tool to be used online as one need not pay any amount for using it. If you too have concerns in calculating your taxes, then you must begin with the best tax calculator.

ELSS Tax Saving Mutual Funds

Most of us search for savings options when the taxman knocks at our door. Most of the times, we tend to wittingly or unwittingly ignore ELSS. A diversified tax saving mutual fund, Equity Linked Savings Scheme (ELSS) is one where major chunk of the corpus is invested into the equity markets.

Now, you can start investing in ELSS schemes through the SIP route. However, you need to note that each investment will envisage a lock-in period of 3 years from the date of investment. ELSS funds provide you with two the growth and dividend options. Growth option gets you a lump-sum amount after the completion of lock-in period whereas the dividend option gets you dividend whenever a fund announces dividend, even if it is in the lock-in period.

ELSS funds are becoming an increasingly popular instrument, let’s find out why it could be a useful investment for you.

Get the benefit of tax savings and investment

ELSS provides you with the dual benefits. Moreover, owing to its market edge from equity exposure, it helps multiply your money faster while keeping your taxes under check through section 80C benefits. Therefore, ELSS is not just a plain vanilla savings instrument unlike PPF. ELSS opens the option of earning robust returns while saving your taxes.

Lower lock-in period compared with other tax savings options

ELSS has the lowest lock-in period of just three years compared with other popular instruments. These include PPF (15 years), NSC (6 years), and tax-savings FD (5 years). Therefore, ELSS enjoys the highest liquidity among other options.

Returns that are superior and tax-free

Out of all the options available under section 80C, returns from ELSS and PPF are tax-free. Moreover, ELSS provides you with the best returns simply owing to its market edge. Returns from NSC and FDs are taxable. Hence, ELSS gives you the best returns among all instruments.

Opensup equity investment

You may have reservations regarding investing in mutual funds. Moreover, if you have not invested either directly or indirectly into the equity markets, ELSS is the best way for you to commence your equity journey. If you invest in the markets either directly or indirectly, a small rise or fall in the markets can trigger a wrong selling decision. This is where ELSS becomes important. A lock-in period of 3 years in ELSS keeps you tied down and you can see clear returns over a period of three years. If you look at the last two decades, ELSS has provided the best returns compared with all the other under 80C.

Benefits of SIP in Mutual Funds

Systematic Investment Plan (SIP) has become one of the most popular ways of investing in the equity markets, especially to beat the inflation rates over the long run. SIP allows an investor to invest a small and fixed amount of money into a mutual fund scheme.Through SIP, an investor can invest money at regular intervals such as monthly or quarterly for a continuous period of time.

Investors’ financial goals are generally divided into long-term and short-term goals. While international holiday, vacation, or buying luxury items come under short-term goals, buying own home, planning retirement funds, and children’s education come under long-term goals. Enrolling for a mutual fund SIP is one of the easiest ways to benefit from the effect of compounding of money over a long-term horizon to meet all your short-term and long-term goals.

Following are the major benefits of investing in mutual fund SIP:

Regular investing:

SIPs allow you to invest money into various mutual funds at regular time intervals such as monthly, quarterly, or annually.

Maintaining discipline in your asset allocation:

Regular investing creates a good investment discipline, which will help you largely in attaining your financial goals at the end of your investment time horizon.

The power of compounding

SIPs help you largely in terms of compounding the value of money that you invest regularly. In simple words, through the power of compounding, they help you convert smaller portions of money invested over a longer period into a larger corpus at the end of the investment horizon.

SIP allows investments in small amounts

One of the stand-out features of SIPs is that they allow you to invest in mutual funds for amounts as small as Rs. 500 or Rs. 1000 per month.

One of the best ways to start SIPs is to contact a financial professional expert. They will not only provide you with the best SIP options but will also help you align your SIP investments with your financial goals through a good diversification strategy.

List of Baskets:

1. Aggressive basket: Meant for those with high risk-taking capacity. Stocks in this basket are of front-line companies who make up major indices.

2. Mid-cap basket (Very Aggressive): Meant for those with maximum risk-taking capacity. Stocks in this basket show high potential for upside as well as downside.

3. Moderate basket: Meant for those with moderate risk-taking capacity. Stocks in this basket are of companies which have moderate upside as well as downside.

4. Defensive basket: Meant for those with low risk-taking capacity. Stocks in this basket are of companies from defensive sectors and show limited upside as well as downside.