Know the difference between Mutual Fund & SIP

 Know the difference between Mutual Fund & SIP

Many people get confused between Mutual Funds and SIP. Mutual Fund is an investment product, while SIP is nothing but a regular and disciplined method of investing.in Mutual Fund.

Mutual Fund is an investment product and SIP is a mode of investment. 

We can do SIP into a mutual fund.

MUTUAL FUNDS

Mutual Funds are instruments for investment

A Mutual Fund is a professionally managed investment scheme where a fund house pools money from several investors. The idea behind the mutual funds is to get the benefit of diversification of risk

Mutual funds further invest your money in:

Debt instrument

Equity instrument  

Hybrid instrument

SYSTEMATIC INVESTMENT PLAN (SIP)

SIP is a method of investing in a mutual fund. Through SIP, you can automatically invest a fixed sum of money at specified intervals. SIP is the most recommended way of investing in Mutual Funds.

You can invest a small amount on a regular basis either monthly, weekly, quarterly as per convenience. In SIP a specified amount is debited from your account. With SIP you can also buy more units at a low price. It brings financial discipline to your life.

METHOD OF INVESTING IN A MUTUAL FUND

Two methods are available to you to investing a mutual fund.

Lumpsum - It is a popular way of investing in a mutual fund. Lumpsum investment is depositing the entire amount at one go. It is an excellent way of investing in the long run.

SIP - If you want to invest a small amount. Most of the mutual funds allow investors to invest with a minimum amount of Rs.500 or 1000 

Thus SIP is one of the most recommended ways of investing in Mutual Funds