![]() ![]() You have more freedom with SIP investing since you can invest little sums on a routine basis, perhaps weekly, quarterly, or monthly, as you see fit. But with a lump sum, you acquire all the units at a higher price because you do not profit from cost averaging in this case. With SIP, you get the advantage of rupee cost averaging. Mutual fund investment can be done either systematically through SIPs or at once through a lump sum. You may reduce your overall purchase value by purchasing more units whenever the market is down and fewer units when it is high. You can profit from cost averaging if you invest via SIPs. Other methods of mutual fund investment include lump sum payment, STP (Systematic Transfer Plan), etc. Here are some critical factors related to the difference between mutual funds and SIPs:Ī mutual fund is an investment vehicle, while an SIP is a mode of investing in a mutual fund. Now, as you can understand from SIP vs Mutual Fund, SIP is not distinct from mutual funds instead, it is a component. A mutual fund SIP allows you to invest consistently over time and build a corpus to achieve your various financial goals. It is a way of investing money in mutual funds that are investment schemes or vehicles. SIP stands for a systematic investment plan. You can make this decision according to your risk tolerance and financial objectives. With mutual funds, you have the option of investing in debt funds, equity funds, or hybrid funds, among others. ![]() In this, you can own fund units by their contribution. What is a Mutual Fund?Īs the name implies, a mutual fund is a group of assets maintained by an asset management company (AMC). ![]() This article will highlight the difference between Mutual Fund and SIP. It is actually quite simple. Let us look at the difference between SIPs and Mutual Funds in detail to understand better their relationship and role in investing. While SIP is a part of Mutual Fund, the purpose of a SIP is to invest your money at regular intervals and gradually accumulate the corpus you want. Mutual funds are the most common methods of investments that an individual knows of. ![]()
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