Investment through SIP: How to invest with less risk?

We all want to invest our money somewhere where our wealth constantly grows and remains safe. Saving money is a habit which can be very beneficial in achieving long-term goals, such as educating your children or starting a business. But inflation decreases the value of money with time. So, we need to invest our money in something which constantly increases the value of our investment while staying ahead of inflation. Investing in mutual funds can be a really good avenue for investors who want to increase their money while having low risk of loss. One can put money in the mutual funds via systematic investment plan (SIP).

Mutual funds can also be risky, but the risk is less in comparison to direct equity investment. It is because professional fund managers manage the mutual funds and the investment is diversified into various companies and sectors. The total number of demat accounts in India have crossed the 100 million-mark for the first time ever. This implies an increasing participation of investors in the market.

How to invest in mutual funds through SIP?

You can begin your investment online on platforms such as Groww, Zerodha, Motilal Oswal, etc. You don’t need to do any paperwork to begin with a mutual fund SIP. However, KYC will be needed, which can be done online easily. You can easily track the performance of the mutual funds on the dashboard of the platforms.

Benefits of mutual fund SIP:

• You don’t need a large amount of money to get started with a SIP. You can even start with Rs 100, and the amount can be higher if you want.
• You can automate your investment deductions. You can set a date of the month on which you would want to invest.
• Investing through SIP will create a healthy habit of investment and saving your money.
• Investing in mutual funds is very transparent as mutual funds are subject to industry regulation. So fairness and accountability are ensured to the investors.

There are many benefits of investing in mutual funds, but there are also some cons. For instance, investing in mutual funds involve high fees, commissions and some other expenses.

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