Top 3 Benefits of SIP in Mutual Funds

When it comes to managing money, women are often the masters of budgeting and saving. From planning monthly expenses to setting aside money for family needs, we know how to stretch every rupee. We can manage the entire household even in the tightest budget, right? Then why it is said that there is a gap between women & money? Because when it comes to growing that hard-earned money, that is where we lack. But not anymore! You can start growing your money by investing in mutual funds and that too with even smaller amounts like ₹100.

This is where SIPs, or Systematic Investment Plans, come to the rescue. SIPs are like your best friend who can understand your financial needs, and help you in your money growth journey. 

In this blog blog let’s explore the SIP benefits,

What is SIP?

There are two ways of investing in mutual funds one is SIP & other is lump sum. SIP stands for Systematic Investment Plan. A SIP is not a Mutual Fund’s substitute, nor is it a Mutual Fund’s category. It is a way of investing a set amount of money in a Mutual Fund on a regular basis. 

When you set up a SIP, a specific amount is deducted from your bank account regularly (monthly). The deducted amount is then put into a Mutual Fund of your choice, which grows and accumulates over time. SIPs are popular because it’s economical, and having an automated mandate makes it easier, allowing you to tick something off your to-do list.

Whereas, the other way of investing in a mutual fund is a Lump Sum, in which you purchase units of a Mutual Fund scheme as and when you have the funds. For instance, Ms. Pari got a bonus of ₹50,000 from her company and she invested the entire amount in an Equity Mutual Fund in one go!

What are the Benefits of SIP in Mutual Funds?

1. Start small, grow big

One of the biggest benefits of SIPs is that you don’t need to have a huge amount of money to begin investing. You can start with as little amount as ₹100 per month. It’s cheaper than Starbucks coffee.

Start early, small & leverage the power of compounding which will help you in wealth creation over a long period of time.

You can check out Lxme’s mutual fund portfolios which are well-researched and curated by experts where you can start investing with just Rs.100.

Do you know? If you invest  ₹1,000 every month through SIP, for 15 years, with an expected rate of return of 14% p.a.*, then you can accumulate ₹6.12 lakhs! Isn’t that exciting?

2. Rupee Cost Averaging

Investing in SIPs on a regular basis allows you to take advantage of Market Volatility while removing the need to time the market. When we invest, we usually aim to buy Low and Sell high (in order to earn profit). SIP is the best way to invest as you can’t time the market. 

This approach is called rupee cost averaging, it helps you buy more units when prices are low and fewer units when prices are high, balancing out the risks. Now let’s have a look at how it works,

Example: Investing through SIP

Rashi is a disciplined SIP investor and she invests ₹ 1000 monthly. Given below are her investments and the no. of units purchased by her for 5 months – 

MONTH	MONTHLY SIP	NAV OF FUND	NO. OF UNITS BOUGHT
Jan	₹1,000	₹100	10
Feb	₹1,000	₹94	10.64
March	₹1,000	₹91	10.99
April	₹1,000	₹96	10.42
May	₹1,000	₹110	9.09
	₹5,000		51.58

Total no. of units – 51.58

Average Cost of Investment – ₹97.78 (5000/51.58)

Total Value of Investments at May – ₹5,624.8 (51.58*110)

Investing through Lump sum

Isha has received a bonus at work and decides to invest ₹ 5000 via Lump sum. Given below is her investment and the no. of units purchased by her for 5 months 

MONTH	Lump Sum	NAV OF FUND	NO. OF UNITS BOUGHT
Jan	₹5,000	₹100	50
Feb	–	₹94	–
March	–	₹91	–
April	–	₹96	–
May	–	₹110	–
	₹5,000		50

No. of units – 50

Average Cost of Investment – ₹100 (5000/50)

Total Value of Investments at May – ₹5,500 (50*110)

As we can see from the example above, Rashi was able to purchase more units as compared to Isha in the same time period and as a result, her invested value was higher. Her average cost of investment was also lower than Isha’s. This is rupee cost averaging in SIP. 

3. Build a habit of disciplined saving

We all know how our life gets busy with bills, shopping, and unexpected expenses. However, with an SIP, your investment happens automatically every month. This builds the habit of disciplined saving without you even having to think about it.

Over time, this habit can help you achieve big goals like creating an emergency fund, buying a home, planning your dream vacation, or simply creating wealth.

How to start your SIP through Lxme?

To start investing through Lxme, you just need an Lxme Investment Account which is free to open and takes just 5 minutes if you are KYC verified. If you are not KYC verified our team will help you in the same, just comment “KYC Assistance” or click here and we’ll get back to you on the same.

Once you open the Lxme Investment Account, then you are ready to start investing in any Lxme portfolios & start your financial journey.

Lxme Pro-tip for women:
Set your SIP date right after your salary or earnings come in. This way, you “pay yourself first,” ensuring your financial goals stay on track before other expenses take over.

One of the mutual fund benefits is investing through SIPs which are truly a game-changer for women. They’re easy to start with small amounts, require no market expertise, and help you achieve your goals over a period of time. Whether you’re saving for your child’s future, planning for retirement, planning to buy a house or just looking to grow your wealth, SIPs are the perfect partner in your financial journey.

Lxme has expert-curated portfolios for all your financial goals, check it out and start investing now! If you to know how much you can create with your SIP investment then check out the SIP calculator.

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