SIP VS Mutual Fund: How to Invest in 2022

A systematic Investment Plan is a method of investing in Mutual Funds and not a product or investment option. It is just a process through which you can contribute small but regular amounts to build a good profit. Also, It is usually considered a good method. The first thing you must do is the SIP and Mutual Fund.

But what is the SIP and Mutual Fund? What are its benefits? And how to do it correctly? I Will help you answer all these questions in this post? You will start with a bang investment in SIP and Mutual Fund. So let’s get started right away

What is SIP?


A systematic Investment Plan is a mode of investment through which an individual can invest a fixed amount at fixed intervals like Monthly, Quarterly, Yearly, etc. But  It also regularizes the habit of investing and brings financial discipline to the investor.

Generally, regular income investors prefer SIPS. SIPs are the best means to invest since they allow you to put money into mutual funds for the future without disrupting your current lifestyle.

What is Mutual Fund?

What is Mutual Fund

A Mutual Fund is an investment vehicle that pools money from investors with joint investment objectives and invests in respective investment avenues like equity, debt, money market instruments, etc.

A mutual fund is a group of assets that have been pooled together in which you buy units to gain proportionate ownership.

Fund managers who are professionals who are experts in the financial markets, manage these funds. But The purpose of a mutual fund is to provide you with the benefit of risk diversification.

Advantages of SIP

If you invest small amounts on a regular basis either weekly, monthly as per your convenience. Also, You can invest in a variety of financial instruments like debt mutual funds, equity mutual funds based on your risk horizon.

Investment through SIP usually gives better returns in the long run i.e if invested for a longer period.

In order to enjoy good returns, you have to invest your money in Mutual Funds for a longer period. Also, SIP is usually considered a good way to do it. The risk factor always remains and you cannot be sure of the results.

10 Simple Steps that you need to follow to start your SIP are:

  1. Set your finance goals.
  2. Measures your risk appetite.
  3. Plan your investment horizon.
  4. KYC Compliance.
  5. Invest online/offline.
  6. Invest directly/through financial advisors.
  7. Select fund type.
  8. Decide the Date and amount of SIP.
  9. Decide the mode of payment.
  10. Submit Application.


In short, a mutual fund is a type of investment avenue, whereas SIP is a method or way of investing in mutual funds. one can invest in mutual funds in the form of SIP or invest in a lump sum.

That is it! Next time when someone wonders, What is SIP and Mutual Fund? Have questions? Let me know in the comments below. I will try my best to answer all of them.

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