Frequently Asked Questions (FAQ) - SIP4Wealth
1. What is SIP?
Systematic Investment Plan (SIP) is a method of investing in mutual funds where you invest a fixed amount at regular intervals.
2. What is the difference between SIP and Lumpsum?
- In SIP, you invest small amounts at regular intervals.
- In lumpsum investment, a large amount is invested at once.
3. What is the minimum amount required to start SIP?
You can start SIP with as little as ₹500 per month. Some funds allow investments from ₹100.
4. How does SIP work?
With SIP, you invest a fixed amount periodically, purchasing mutual fund units based on the NAV (Net Asset Value) of that day. This benefits from rupee cost averaging.
5. What are the benefits of SIP investment?
- Start with small amounts
- Less impact of market volatility
- Power of compounding
- Long-term wealth creation
- Automatic investment
6. Is SIP safe?
SIP is a method of investing in mutual funds, which are market-linked. While there is risk involved, SIP reduces market fluctuations' impact over the long term.
7. What is the ideal duration for SIP?
There is no fixed duration, but investing for 5-10 years or more is recommended for better returns.
8. Can I withdraw money from SIP anytime?
Yes, you can withdraw anytime unless there is a lock-in period, such as 3 years in ELSS funds.
9. Is SIP taxable?
- Equity Mutual Funds: Withdrawals within 1 year attract 15% Short Term Capital Gains Tax (STCG).
- After 1 year, profits above ₹1 lakh are taxed at 10% Long Term Capital Gains Tax (LTCG).
- Debt Mutual Funds: Taxed based on your income slab.
10. What happens if I miss an SIP payment?
If you miss a payment, your investment remains active, but multiple missed payments may lead to SIP cancellation.
11. Which mutual fund is best for SIP?
- Large Cap Funds - Low risk, stable returns
- Mid & Small Cap Funds - High risk, high returns
- Hybrid/Balanced Funds - Mix of equity & debt
- ELSS Funds - Tax-saving with 3-year lock-in
12. How to set up SIP auto-debit?
You can set up an auto-debit mandate via your mutual fund app or broker’s platform.
13. Can I run multiple SIPs?
Yes, you can invest in multiple SIPs in different mutual funds for diversification.
14. Is SIP better than Fixed Deposits (FD)?
While FDs offer fixed interest, SIPs can provide higher returns in the long run. However, FDs are risk-free, whereas mutual funds are market-linked.
15. How to stop an SIP?
You can cancel your SIP anytime through the mutual fund app or broker’s platform.
Need More Help?
If you have more questions or want to start an SIP, contact us at 📞 Call: +91 8285724830 | WhatsApp: 💬 WhatsApp Now | Visit: sip4weallth.blogspot.com
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