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Knowing Further About Sip Plans And Benefits Of Savings

By Author: jignesh shah
Total Articles: 7

People are nowadays aware that they are required to make investments even in the smallest of assets to benefit in the future. As a family grows through marriage and offspring, more ambitions are built along the way. It is for the purpose of gaining a successful life for every member of the family, as each person would have their own personal goals to be achieved some day, where savings are required.

Purpose of Investments

It is vital to understand that the future is not very far as compared to the present when it comes to taking important decisions related to the same. Such realizations help in figuring out the significance of savings and investments. There could be a number of reasons for any person to decide on keeping aside a part of his earnings or wealth. All such motivations are majorly meant to lead a better lifestyle at a later stage. Some such points have been discussed below.

Leisure Trips

Most people of the world love to travel and explore new destinations around the globe. While some of them would have already visited many places during their childhood days with their parents, most would not have been able to afford such luxuries. After growing up and starting to earn income themselves, such dreams would become stronger aspirations to be achieved one day.

Married couples would wish to travel distances as a part of their personal goals, even after having kids. The happiness and joy a leisure trip could bring upon people cannot be described just in words. They remain as memories to be cherished forever in the lives of the people who would have travelled to their dream destinations during their lifetime on the planet.

Anyone would wish for a break from the routine daily life, especially when involving hectic work regimes. This is why vacations are necessary in the life of every person- even if they work only part-time or are homemakers. At the same time, such holiday plans require a great amount of money to be invested as a part of the expenses related to the stay, travel and food for the groups travelling.

From the usual income earned every month by a person, it may not be possible to afford such luxuries in life. Even if the other members of the family would also be supporting the household financially through their earnings as well, several other priorities would make them postpone such plans. This is why a part of the earned income is advisable to be invested in SIP plans and other forms of investments which can be utilised later for implementing such essential arrangements.

A Dream Home

Who among all of the mankind living on the planet would not want to have a shelter of their own to live the rest of their lives in? Everyone would usually wish for owning a house of their own at some point of life. It would serve as not just an accommodation protecting them from the extremity of the four climates but also from various other dangers present in the world.

Ownership of a house also means the possession of an asset which could be passed on to the succeeding generations as well, as their inherited wealth. However, it is a known fact that owning an accommodation requires a great deal of money to be spent for the purchase or building of the shelter. Timely investments in schemes like SIP plans can help in fulfilling such goals of mankind.

Safeguarding future of Children

It could never be known what little children would become when they grow up to be adults in the future. They would possess their own set of personal goals and aspirations at any point of life between their childhood days and adulthood phase. While one would wish to become a specialized medical practitioner, another might want to be known as a famous engineer.

So on and so forth would be the dreams of different kids and one cannot analyze by any chance as to what they would eventually become when they grow up. Various courses of education cost more and the location of their higher studies also would contribute to such costs. SIP plans help parents to take care of such matters in an effective way through the disciplined form of investments they could make from the initial stages of parenthood itself.

Peaceful Retirement Life

After a certain age limit, most organizations let their employees to retire from their services as it is understood that the time would be for them to rest in life after having toiled hard until then. As a token of appreciation for their work performed till date, they would mostly be given a set sum of money or monthly pensions to aid the next phase in life.

While these sums of money might be just enough to survive for the person and his family, it might not be able to provide the complete peace of mind one would wish for during retirement. To meet extra expenses of vacations and other luxuries, large amounts of money would be required. Investing in SIP plans from the days of youth would help them in achieving such dreams without any worries and much effort in the old age.

Savings through SIP schemes

There are many kinds of investments that people can do now as compared to the olden days. In those previous times, only a savings account could be opened at a bank or a post office as an investment. Over time, several other avenues opened their doors to invite the savings of people to be invested in forms involving shares and bonds- offered by government and private authorities, insurance, debentures, etc.

In the present era, with the arrival of many such methods of financial management, it could become quite challenging to choose the options to proceed with for making investments. Since the savings of every person are mostly a part of the hard-earned or preciously inherited funds, it is important to take care of the way these would be invested as well.

How to avail the facility of SIP plans?

To make it easy to choose from, among the several options available for mankind to invest their valuable assets such as money in, SIP plans have been developed. These plans help a person to keep aside a part of their money on a periodical basis as savings, and at the same time invest those amounts in mutual funds of brands and companies of choice.

With booming technological developments across the globe, banking has been made possible to be done on the fingertips of people. Through many apps and websites developed for the purpose of bringing ease and convenience to the customers, financial institutions have taken their services an extra mile ahead of the expectations of the general public. SIP accounts can also be opened and activated through online facilities provided by leading institutions like the Kotak Mahindra group.

They provide this handy tool to make investments without any efforts by the public. They help people in realizing their personal goals like the ones mentioned earlier, through such investment tools. Aspirations like higher education and marriage expenses of children, dream homes and dream automobiles, planning for luxurious vacations and retirement lives, etc., are turned into reality by the SIP plans offered by the Kotak group of financial institutions.

Importance of SIP

The Systematic Investment Plan or popularly known SIP schemes let people invest in small sums in regular intervals. A minimum of INR 500/- is required to start an SIP account with the mutual funds section of a bank like that of Kotak. Without affecting the monthly budget of the household, anyone could make such investments of negligible amounts of money.

The frequencies could be decided as per the choice of the investor from among the options of monthly, quarterly, semi-annual and annual bases. It would bring a discipline in the asset management through investments in the lives of the people doing so. Only the initial set up of the account in the SIP plans requires efforts from the person saving the money periodically.

After the SIP account is activated, the bank account linked to the same is provided with instructions to debit the relevant amount automatically in the prescribed intervals. The Rupee Cost Averaging method ensures that the market fluctuations do not have an adverse impact on these investments made through SIP plans. Such a feature builds confidence in the person investing into the plan, to utilize the scheme at its best.

The significance of a SIP Calculator

Most institutions providing financial services for the purpose of helping people in managing their assets effectively, also offer additional highlights to aid these services. The SIP calculator is one such add-on feature provided by the mutual funds management units of leading financial institutions like Kotak. Such a calculator is beneficial for the investor to help understand how the SIP plans would work to bring favourable results towards their goals.

Depending on the number of years chosen for making investments through SIP, the returns from the same would vary. Such a concept is explained through the use of an SIP calculator while opting to save money for a better future. According to one’s financial goals, the most appropriate scheme is chosen in SIP to invest the saved amounts in relevant mutual funds.

The rate of returns through SIP

Usually there are no pre-fixed percentages to show as a rate of returns for the money invested in SIP plans. It would however, completely dependent upon the type of mutual funds selected by the concerned person to invest his saved money in. At the same time, fluctuations in the market also influence the rate of returns that are received eventually.

The minimum limit of investment in an SIP has been mentioned earlier, i.e. INR 500/-. Starting with this amount, people can invest as much as required in the plans without any restrictions in the maximum limits. The more the amount of investment would be, the more the returns also would be handed over at the end, to the person taking such efforts to save money for the future.

Options of funds

People who generally proceed with making efforts for achieving their personal goals and aspirations through effective financial management techniques like that of SIP plans are provided with various options. These choices are with respect to the mutual funds in which the savings would be utilized to be invested in. In short, all types of mutual funds can be tapped for the purpose.

SIP plans also offer the investor with Growth and Dividend options to select from while choosing their fund types. They are also allowed to switch between these two options during the tenure of the scheme in case they wish to do so. However, if a lock-in period has been enforced on the chosen SIP plan such facilities could not possibly be availed.

Investing for a better future

People must understand the importance of SIP plans due to the ease and convenience they offer to the investors. They can start more than one SIP accounts in their lifetime and pave the way for making wealth for their future benefits. With the enhancements in technology these days, digitalization facilities are provided even to avail the service of SIP plans for the customers of financial institutions.

Jignesh Shah is a blogger about lifestyle and related aspects. He has written several blogs regarding finance management in the personal lives of people. A focus on the increasing demand for SIP plans can be observed in most of those blogs.

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