Frequently Asked Questions

1. What is SIP?

SIP stands for Systematic Investment Plan, where you invest a fixed amount monthly in mutual funds.

2. How is SIP return calculated?

The SIP return is calculated based on the expected annual rate of return, investment duration, and amount invested monthly.

3. What is the average SIP return in India?

The average return is between 10%-12% annually, depending on the mutual fund scheme.

4. Can SIP give negative returns?

Yes, SIP can give negative returns if the market performs poorly.

5. Can I withdraw from my SIP at any time?

Yes, you can redeem your SIP units anytime, depending on the mutual fund scheme.

6. Is SIP better than lump sum investment?

SIP helps in rupee cost averaging, and it’s generally less risky than lump sum investments, especially in volatile markets.

7. What is the lock-in period for SIP?

The lock-in period depends on the type of mutual fund. For ELSS, it is 3 years; for others, it is open-ended.

8. How do I start an SIP?

You can start an SIP through mutual fund platforms or banks.

9. Can SIP investment help with tax savings?

Yes, SIP investments in ELSS funds qualify for tax deductions under Section 80C of the Income Tax Act.

10. What are the benefits of SIP?

SIP helps in disciplined investing, compounding, and reducing the impact of market volatility.