Why are you investing? You may have different goals, including building a retirement corpus, buying a home, marriage, etc. Once you determine your risk appetite, you must fix a goal.But, if you are old and have many financial obligations, you can take a more conservative approach. Remember, the higher the risk, the higher the returns potential. If you are young, you can afford to take an aggressive approach and take a higher risk. First and foremost, you must assess your risk-taking capacity.Here are a few useful tips you must consider to invest in SIP: Just like any other investments, investing in mutual funds, thorough SIP requires careful planning. For example, you can mention that your SIP amount is used to purchase units of a scheme if the NAV falls to a certain level as decided by you. You can set specific triggers for the investment. Trigger SIP This type of SIP is beneficial if you have in-depth knowledge of the financial market and have the expertise to predict the movement in the market. If you wish to invest for only a fixed period, you must mention the end date without fail. You can stop the SIP by giving a written application to the fund house. In such a case, the SIP turns into a perpetual SIP, i.e., the amount will continue to be debited from your account. However, most people indicate the start date, but fail to mention the end date. Perpetual SIP When you start a SIP, as per the investment mandate, you must mention the start date and the end date in the application form. A step-up SIP is an excellent option for salaried employees who can increase their investment as your income increases. 10,000, and instruct your bank to increase the investment amount by Rs. For example, you can start a SIP with Rs. Step-up SIP This type of SIP allows you to increase the investment amount at fixed intervals. Thus, flexible SIP gives you the option to adjust the investment amount as required. Similarly, if you are facing a financial crunch, you can reduce the SIP payment and increase the same eventually when you have more liquid income. There is a pre-decided formula that allows you to invest more when the market is falling and vice-versa. Some of the popular SIPs are: Flexible SIP Flexible SIP, also known as Flexi SIP allows you to adjust the investment amount based on your financial condition and market condition. Today, mutual fund houses have introduced different SIPs to suit the varying needs of the people. As the SIP investments grow through the power of compounding, the longer your stay invested, the higher the returns. When you start a SIP, you invest in a time-bound manner, and, therefore, you need not worry about market fluctuations. The structured approach of SIP brings discipline to the investment and acts as an excellent avenue for wealth creation in the long-run. 1,000, the amount will be debited from your bank account in the mutual fund of your choice on the pre-decided date. For example, if you start a monthly SIP of Rs. A significant benefit of investing in mutual through SIP is that you can automate the payment by providing a standing instruction to your bank. Many new investors tend to use SIP and mutual funds interchangeably, but SIP is not an investment itself, but only a means to invest in mutual funds of your choice. Systematic Investment Plan or SIP is a mode of investment offered by the mutual funds wherein you can invest a fixed sum at frequent intervals such as monthly, quarterly, etc.

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