According to media reports, LIC Mutual Fund is on the verge of introducing a new daily Systematic Investment Plan (SIP) option starting from Rs 100. This move is in line with the Securities and Exchange Board of India (SEC) decision.SEBI) initiative to promote micro-SIPs and expand retail investor participation.
If the proposed changes are implemented, the daily SIP will be reduced from Rs 300 to Rs 100 at present. The monthly SIP will be reduced from Rs 1,000 to Rs 250, and the quarterly SIP will now require only Rs 750 instead of the current Rs 3,000.
“The introduction of a daily SIP of Rs 100 by LIC Mutual Fund is a big step towards making investing simpler and more accessible. It shows their commitment to helping people build wealth with small and manageable amounts. However, you don’t have to invest daily to get decent returns as even monthly SIPs can withstand volatility quite well. We did the math and the difference in returns between a daily SIP and a monthly SIP is quite small at around 0.1 per cent. So, for most investors, sticking to a monthly SIP should be enough,” said Shweta Rajani, Head – Mutual Funds, Anand Rathi Wealth Limited.
Anil Rego, Founder and Fund Manager at Right Horizons, shares his views on its benefits.
Wider accessibility: Reducing the SIP amount to Rs 100 makes the investment more accessible to a wider range of investors, particularly those in the rural and low-income segments.
Encourage Savings and Investment: Daily SIPs can help cultivate the habit of saving and investing regularly, which is essential for financial literacy and long-term wealth accumulation.
Financial Inclusion: This initiative supports the broader goal of financial inclusion by ensuring that more people have the opportunity to participate in financial markets.
LIC Mutual Fund’s Rs 100 daily SIP is especially suitable for the following segments of people.
Low-Income Investors: People with limited disposable income can start investing with a smaller amount, making it more manageable.
Young professionals: those who are starting their professional career and want to develop the habit of saving and investing early, even with small amounts.
Retail Store Owners: Store owners with fluctuating income who may prefer smaller, more flexible investment amounts.
People seeking financial discipline: Those who want to cultivate a disciplined saving habit by investing daily, which makes budgeting easier. Overall, it seems to be a proactive measure that could benefit both the fund manager and the investors.
What should investors consider before investing in this?
“Before you jump into the adventure, it’s important to keep a few things in mind. Make sure this investment fits your financial goals, whether short-term or long-term. Also, diversify your investments across different categories and market capitalizations to balance the risk. And of course, aim for returns that outpace inflation over time so your money actually grows in real terms,” Rajani said.
First published: September 23, 2024 | 17:22 IS
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.