SIP Benefits - 5 Important Advantages of SIP Explained

05 May 2021

Invest regularly today to earn great rewards tomorrowTLDR Points

Start an SIP with as low Rs. 500

Benefit from Rupee cost averaging

Explore the power compounded interest with SIPs

Invest at your convenience from anywhere

Small, consistent efforts today can reap rich rewards tomorrow. Many of us have read Aesop’s fable of the thirsty crow and the water jug in our childhood. The crow raises the water level by dropping small pebbles in the jug consistently. Systematic Investment Plans or SIPs are a similar concept. Regular, small investments today can lead to decent rewards in the future. Are you looking for more benefits of investing through an SIP? Here they are:

Convenience guaranteed – Is it difficult for you to pay a large part of your salary every month towards your investments? Then you can start with a small monthly sum of Rs. 500 and easily increase it as your income increases in the future. If you know that your expenses are about to rise, you can lower the amount you spend as well. This flexibility keeps you firmly in control of your money always.

The power of averages – Not knowing when to invest or waiting for the perfect opportunity to invest when the markets are low is not always possible. The funds you have saved for investment may suddenly get diverted towards buying an expensive toy for your child, niece, or nephew, or that set of decorative hand-carved spoons you saw an ad for online. With the SIP advantage, your money gets saved for you. The lower market rates are beneficial for you, and you buy more units. At higher market rates, the cost per unit would reduce in the long run as you purchase a lower number of units.

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Compounding is a game-changer – Long-term investments can grow through interest or earnings (profits), or dividends. The longer you stay invested, the more you earn, and the rewards keep growing. One of the best SIP benefits is where your money creates more money just for you.

Returns make it worthwhile – One of the most significant SIP benefits is that returns are usually better than traditional investment options. If you have dreams of driving a high-end car or owning your own house with a nice back garden, then you can take the SIP route.

Withdrawals are easy – One of the best SIP benefits is that you will not need to wait for your money when you need it. With just a few quick online steps, either a part or the entire investment can be credited to an account and used.

For most, making that first million may be a challenge. There is a lot of planning and hard work involved in making money. Growing your investments is also about consistency. SIP benefits ensure that after some time has passed, your money has grown and you have more to spend. Put your money to good use when you have the opportunity to do so. The time to invest is now, and you can start your first, or next SIP investment with digibank by DBS.Open a DBS Bank Account Now