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Top 5 reasons you should start an SIP

Before delving into the reasons you should start an SIP, let’s first understand what an SIP or Systematic Investment Plan is:

An SIP is a popular investment strategy available to everyone where instead of making one lump sum investment, you put in a fixed sum of money each month, over a period of time. You decide the monthly investment amount and the time span of this investment. This system does away with the need to time the market, making it attractive for investors. With Citibank, you can invest as little as Rs 1,000* a month in an SIP.

It is important to understand that an SIP is not a type of Mutual Fund. It is a method of investing in a Mutual Fund—an incremental and on-going investment strategy that you can adopt to minimize risk while participating in the financial markets.

When you invest a fixed amount every month, the number of Mutual Fund units you actually buy depends on their market price. Therefore, with the money you invest each month, you can buy fewer units when the market moves up and more units when the market moves down. This brings down and averages the price of purchase. Over time, your chances of making a profit are much higher when compared to a one-time investment.