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    Do mutual funds offer a periodic investment plan?

    Synopsis

    Systematic Investment Plans allow you to invest small amount of money periodically.

    What is an SIP?ThinkStock Photos
    You can invest either a lumpsum in mutual funds or stagger your investment over a period. Systematic Investment Plan is an investment strategy wherein an investor needs to invest the same amount of money in a particular mutual fund at every stipulated time period. SIPs can be daily , weekly, fortnightly or monthly.

    Investing via SIPs enables an investor to take part in the stock markets without actively timing it. The staggered approach also helps the investor to benefit by buying more units when the price falls and less units when the price rises. This scheme helps reduce the average cost per unit of investment.

    Small investors can start with investing as low as Rs 500 per month in mutual funds and create wealth over long period of time.


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