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Investing in a Systematic Investment Plan Has Its Advantages
05 Jan 2023

Although the equity market has traditionally delivered higher returns compared to other options, it has always been considered to be a high risk investment. However, that need not be the case. 

With a Systematic Investment Plan (SIP), you can offset the increased amount of risk to a certain extent. That said, the advantages of some of the best SIP don’t just stop with that though. In fact, they’re plenty. Here are a few advantages of Systematic Investment Plans that you can get to enjoy by simply opting for this method of investment.  

1. Affordability

You don’t need hefty capital to invest in a mutual fund anymore. In fact, one of the major benefits of an SIP investment is that it is very affordable. You can start a Systematic Investment Plan for a contribution as low as Rs. 500 per month. 

This makes mutual funds far more accessible to a wider range of individuals. That said, some of the top mutual funds for SIP may impose a minimum investment limit, which is something that you should take into account when investing. 

2. Flexibility 

With a Systematic Investment Plan, you get to enjoy maximum flexibility. You can not only choose the investment tenure and the amount of monthly investment, but can also select the best fund for SIP according to your needs and requirements. If you ever wish to pause your SIP investments for a certain period of time before picking it up again, you can do that as well.  

3. Rupee Cost Averaging

Since you invest in the market consistently month after month with an SIP, you get to activate the benefit of rupee cost averaging. By purchasing more units of a mutual fund when the NAV is low and less units when the NAV is high, a Systematic Investment Plan helps lower your total cost of investment. This averaging out effect is what is known as rupee cost averaging. It prevents you from losing your investment value during volatile market conditions. 

4. Perfect for the long-term

Although the equity market is considered risky, you can still earn good returns over the long-run. With a sufficiently long investment tenure, a carefully planned Systematic Investment Plan can allow you to generate significantly high returns on your investment. This makes an SIP the best long-term investment option.  

5. No need to time the market 

Timing the market is not only very hard, but is a futile exercise. With a Systematic Investment Plan, you would be purchasing mutual fund units each month on a consistent basis. This completely eliminates the need to time the market. All that you need to do is sit tight and let the SIP automatically do its thing. 


Apart from being very convenient, a Systematic Investment Plan helps inculcate a sense of financial discipline as well. That’s not all. One of the many benefits of an SIP is that you can withdraw the funds at any point in time, giving you instant liquidity whenever you want it. 

Does reading about SIPs make you want to invest in one? In that case, get in touch with Motilal Oswal right away. You can open a demat account online within just a few minutes and get started with the best sip for the long-term in no time. 

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