Mutual Funds: How to start SIP in mutual funds in just 100 rupees?

Mutual Funds: If you invest 6,000 rupees every month for 30 years and you get an average return of 12 per cent annually then you will be able to deposit 2.11 crores.

Mutual Funds: Investing in equity is the best way to raise money. As an asset class, equities have given higher returns over the long term than bank deposits, gold and even real estate. Recently, the index of market like SENSEX has attained a new height, which is attracting new investors to the stock market.

There are many ways to start investing in equity. If you understand fundamentals and know market research, then you can invest by buying shares of companies directly in the equity market. But if it is not possible to do so, relying on the experience of the mutual fund manager on the mutual fund will be the right decision. Through mutual funds, you can choose the share portfolio according to the theme of the scheme. The fund manager takes decisions to buy, invest or sell the shares.

You can also invest in Equity Mutual Funds every month in a systematic way. You can also start with a small amount like 100 rupees. Although most funds prefer an installment of Rs 500, many funds offer an investment of Rs 100.

Set a goal,

it is very important. Investment goals are the goals you want to raise on an average return in a given time. For example, the goal of raising 2 crores in 30 years for retirement. For this, if you invest Rs 6,000 every month for 30 years and you get an average return of 12 per cent annually, then you will be able to deposit 2.11 crore. Setting goals makes it easy to get success from your investment. It also helps you to choose the right investment option. For example, if you had invested in the bank’s recurring deposit for the same target of Rs 2 crore on which you get 5% interest after tax liability, you would have to deposit Rs 25,000 every month to achieve this goal in 30 years. Or it would have taken 54 years to raise the amount of Rs 6,000 every month.

This shows that by choosing the right investment option and expecting fixed investment duration and returns for it, you will be able to use capital properly for the goal. And by setting the goal, you will be able to understand it better. In particular, Equity Mutual Funds are good for your long-term goals as it helps investors to get average returns from market fluctuations.

Choose the right fund:

Equity mutual funds have many categories and you have to choose the right fund according to your risk appetite and goals. If you want to save income tax, you can choose ELSS. If the risk potential is moderate, then you can choose a lordcap fund to invest in more stable and profitable companies. If you want to take more risk so that you can get big growth, then you can take midcap or smallcap fund. If you want to invest in index like Nifty, then you can buy index fund or ETF. You have a lot of options. What kind of fund are you choosing and how are its past returns should match the target you want to achieve. You can choose one or several funds accordingly.

Online Register 

a special feature of mutual funds, the ease and convenience of investing in them. You can also register online directly with the fund house. You can get your bank set-up to transfer the investment amount directly to the fund account. You can start, stop or cancel SIPs of your choice, switch between funds and even choose a plan to withdraw when the time comes. You can do one or many more SIPs in the same fund. If the fund facilitates, then you can start in most funds for 100 rupees or 500 rupees.

Periodic reviews

You should keep checking the performance of your investment at intervals of some time to know whether it is going according to your expectations or not. Many times it is a better option to do nothing for your investment. It has been seen that often mutual funds (Mutual Funds) have given good returns even after leaving the investment for a long time.

However, it is still necessary that you keep checking the performance of the investment from time to time. Suppose you have expected 12 per cent annual return and your fund is giving only 8 per cent, then you will be unable to achieve your goal. Therefore, keeping track of the fund and taking steps accordingly is essential for a successful investment.

Increase investment every year

You have the option to top-up your investment, that is, you can increase investment from time to time to achieve your goal quickly. You may start with Rs 100 when your income is low, but as your income increases, you also need to increase your investment. With this, you will be able to get the goals fixed for you quickly or you will be able to accumulate a large amount to beat inflation. With an annual interest of 12% on an SIP of Rs 500 every month, you will be able to deposit 17.64 lakhs in 30 years, but if you continue to increase this investment by 15% every year, then you can raise 83.63 lakhs.

Investing in Equity Mutual Funds is the best way to achieve big and difficult goals in the long run. Whenever you are confused, consult an investment adviser.