Maximizing Returns with Mutual Fund SIPs: Tips to Follow

Mutual funds have been gaining popularity in recent years as a reliable investment opportunity. With the ability to invest in a diverse portfolio of stocks and bonds, mutual funds offer investors the potential for high returns with significantly less risk than buying individual stocks. One investment Approach that has gained traction is the Systematic Investment Plan (SIP). SIPs help investors to invest small amounts regularly, thereby reducing the risk of market fluctuations and generating better returns in the long run.

In this article, we will go through what mutual funds and SIPs are, the comparison between investing a sum amount or through SIPs, how to invest in mutual fund SIPs, which mutual funds to invest in, and several tips to maximize your returns with mutual fund SIPs and best apps for mutual fund in India.

What are mutual funds and SIPs?

A mutual fund is a type of investment where the investor’s money is pooled along with other investors’ money and invested in a diverse portfolio of assets. These assets may include stocks, bonds, short-term money market securities, and other types of securities. Mutual funds are managed by professional fund managers who aim to maximize returns for investors by selecting the right assets.

A SIP or Systematic Investment Plan is an investment plan where the investor can invest a fixed amount of money regularly, say, every month or every quarter, in a mutual fund scheme. SIPs are a disciplined way of investing, where the investor can avoid making impulsive investment decisions.

Comparison between sum amount and SIP investment

Investing a sum amount versus investing through SIPs is a common dilemma that investors face. Here are a few things to consider when deciding which approach to take.

1. Risk: Investing in a single lump sum can be risky as the market fluctuates, and the chances of losing money are high. SIP, on the other hand, is less risky as the investment is spread out over time, thereby decreasing the risk.

2. Convenience: A lump sum investment may require you to gather capital first, which may take some time. SIP, on the other hand, is convenient, easy to set up, and doesn’t need large amounts of capital.

3. Returns: Over longer investment periods, SIPs usually help to maximize returns. However, in the short term, investing a lump sum can be more profitable.

4. Discipline: Investing regularly through SIPs helps to inculcate investment discipline, which can be difficult with a lump sum investment.

How can one invest in mutual fund SIPs?

Investing in mutual fund SIPs is simple and easy. You can either invest through your bank or through a financial service provider like Bajaj Finserv. Here are the steps to invest in mutual fund SIPs through Bajaj Finserv App for your reference:

1. Download the Bajaj Finserv App.

2. Create an account or log into an existing account.

3. Complete your KYC process.

4. Browse through the various mutual fund schemes available.

5. Select the SIP investment plan using the “Invest Now” button.

6. Choose the amount and frequency of investment.

7. Confirm the details and make the investment.

Which mutual funds to invest in?

Choosing the right mutual fund to invest in depends on your investment goals, risk appetite, and investment style. Here are a few things to keep in mind when selecting mutual funds to invest in.

1. Look for a fund with a good track record of performance.

2. Check the expense ratio of the fund before investing.

3. Check the fund manager and their experience.

4. Understand the investment style of the fund.

5. Ensure that the mutual fund aligns with your investment goals.

Tips to maximize your returns with mutual fund SIPs

1. Start early: Starting your SIP investment early gives you the advantage of compounding and can help you generate better returns in the long run.

2. Increase SIP amount: After checking the performance of your mutual fund, you could increase your monthly SIP amount to earn better returns.

3. Stay invested for the long term: Staying invested for the long term, say five to ten years, is necessary to make the most out of your mutual fund SIPs.

4. Choose the right mutual funds: Choosing mutual funds that are aligned with your investment goals and risk Appetite is key to maximizing returns.

5. Diversify your portfolio: Diversifying your portfolio reduces the risk and helps in generating better returns.

6. Regularly track your investment performance: Regular tracking of your investment portfolio can help you understand the overall performance and make informed decisions.

Best mutual fund apps in India

1. Bajaj Finserv App

The Bajaj Finserv App is an all-in-one financial app that offers a range of investment opportunities, including mutual funds. The app offers personalized investment recommendations for investors, making it easy for even first-time investors to invest in mutual funds. It has a simple and user-friendly interface and can be accessed on smartphones, making it highly accessible. Additionally, the Bajaj Finserv App offers features such as paperless KYC verification, fund tracking, and instant investments. Users can choose from a wide range of mutual funds from top asset management companies, making it one of the best mutual fund apps in India.

2. Groww

Groww is a popular mutual fund app that offers a simple and clean user interface. With its intuitive design, Groww makes it easy for beginners to start investing in mutual funds. The app offers a wide range of mutual funds including SIPs, and users can invest with zero commission fees. Other features include instant withdrawals, mutual fund tracking, and performance analysis.

3. ET Money

ET Money is a comprehensive financial app that offers a range of investment opportunities, including mutual funds, stocks, and gold. It provides users with customized investment recommendations based on their profile, goals, and risk appetite. ET Money also offers features such as goal-based investing, financial planning, and expert advice.

4. Paytm Money

Paytm Money is the financial services arm of Paytm, India’s leading digital wallet. The app offers a convenient way for users to invest in mutual funds with zero commission fees. It provides users with various investment options, including mutual fund SIPs. Additionally, the app offers up-to-date information on mutual funds, making it easier for users to keep track of their investments.

5. Zerodha Coin

Zerodha Coin is an app that offers direct mutual funds that allow users to invest in mutual funds without commission fees. The app provides users with a simple user interface and offers features such as goal-based investing, SIPs, and fund tracking. Zerodha Coin allows paperless account opening, ensuring a frictionless onboarding experience.

Conclusion

Mutual funds SIPs are a great way to generate significant returns while minimizing risk. Investing in mutual funds SIPs requires discipline, patience, and a well-defined investment strategy. With the Bajaj Finserv App, investing in mutual funds SIPs becomes easier, and you can track your investments’ performance conveniently. Understanding the above-mentioned tips or strategies can help you maximize returns and achieve your investment goals quickly.