Investing in mutual funds is a great way to grow your wealth over time. This allows you to participate in the financial markets and benefit from the expertise of professional fund managers. A common misconception is that investing in mutual funds requires a large sum of money. However, this is not always the case.
Actually, you can start investing in mutual funds with less than Rs 500 through a systematic investment plan (SIP). In this article, we will explore the concept of investing in SIP mutual funds, with a focus on starting with Rs 500.
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RS 500 SIP Mutual Funds
Understanding SIP Mutual Funds
Before we look into the intricacies of investing with Rs 500, let us first understand what a SIP mutual fund is. SIP is a way of investing in mutual funds where you regularly invest a fixed amount at predetermined intervals. This allows you to invest in a disciplined manner and take advantage of the power of compounding. rs 500 sip mutual funds
By investing a fixed amount regularly, you can benefit from rupee-cost averaging, which reduces the impact of market volatility on your investments. rs 500 sip mutual funds
Benefits of Starting with Rs 500
Investing Rs. 500 may seem like a small amount, but it can be quite beneficial in the long run. Here are some of the benefits of starting with small SIP investments:
- Affordable: Starting from Rs 500 makes investing in mutual funds accessible to a wide range of individuals, including those with limited funds. rs 500 sip mutual funds
- Disciplined savings: SIPs help in developing the habit of regular savings and investments. By committing to investing a certain amount every month, you develop a disciplined approach towards wealth creation.
- Long-term growth: Even small investments can grow significantly over time due to the power of compounding. By starting early and staying invested over the long term, you can potentially build a larger corpus. rs 500 sip mutual funds
- Diversification: Mutual funds provide diversification by investing in a portfolio of assets. Even with a small investment, you can get exposure to a diverse mix of stocks, bonds, and other instruments.
- Flexibility: Many mutual fund schemes allow you to increase your SIP amount gradually over time. This flexibility allows you to align your investments with your income growth. rs 500 sip mutual funds
List of SIP Mutual Funds with Rs 500 Minimum Investment
When starting with Rs 500 in SIP mutual funds, it is important to choose the right fund that suits your investment goals and risk tolerance. Here are some mutual funds that offer a minimum investment of Rs. 500:
- SBI Focused Equity Fund Direct Plan Growth: SBI Focused Equity Fund is suitable for investors looking for long-term growth through equity and equity-related instruments. The fund has a market cap-agnostic approach and will invest 65% (minimum) in equities and equity-related instruments. SBI Focused Equity Fund Direct will also allocate 35% of the net assets into debt or money market securities. rs 500 sip mutual funds
- Nippon India Small Cap Fund Direct-Growth : The Nippon India Small Cap Fund Direct Growth is rated very high risk. The minimum SIP investment is set at ₹100. Exit load of 1% if redeemed within one month. The scheme seeks to generate long-term capital appreciation by investing predominantly in equity and equity-related instruments of small-cap companies.
- SBI Small Cap Fund Direct Growth: SBI Small Cap Fund Direct Growth is an equity mutual fund scheme launched by SBI Mutual Fund. This scheme was made available to investors on June 29, 1987. Rama Iyer Srinivasan is the current fund manager of the SBI Small Cap Fund Direct Growth Fund. The fund currently has an Asset Under Management (AUM) of ₹8,23,520 Cr, and the latest NAV as of October 4, 2023 is ₹150.85. rs 500 sip mutual funds
- Invesco India PSU Equity Fund Direct-Growth : Invesco India PSU Equity Fund Direct Growth is a Equity Mutual Fund Scheme launched by Invesco Mutual Fund. This scheme was made available to investors on 24 Jul 2006. Pranav Gokhale, Amit Ganatra is the Current Fund Manager of Invesco India PSU Equity Fund Direct Growth fund. The fund currently has an Asset Under Management(AUM) of ₹58,240 Cr and the Latest NAV as of 04 Oct 2023 is ₹45.13. rs 500 sip mutual funds
- SBI Technology Opportunities Fund Direct Growth : SBI Technology Opportunities Fund Direct Growth is a Equity Mutual Fund Scheme launched by SBI Mutual Fund. This scheme was made available to investors on 29 Jun 1987. Anup Upadhyay is the Current Fund Manager of SBI Technology Opportunities Fund Direct Growth fund. The fund currently has an Asset Under Management(AUM) of ₹8,23,520 Cr and the Latest NAV as of 04 Oct 2023 is ₹175.49. rs 500 sip mutual funds
It is important to note that although the minimum investment requirement in these funds is Rs 500, you can choose to invest a higher amount if you have the ability to do so. Additionally, it is advisable to consult a financial advisor or do thorough research before taking any investment decision. rs 500 sip mutual funds
How to Get Started with Rs 500 SIP Investment
Getting started with a SIP investment of Rs 500 is a straightforward process. Here are the steps to follow:
- Choose a fund: Research and choose a mutual fund that suits your investment goals and risk tolerance. Consider factors such as historical performance, fund manager expertise, expense ratio and asset allocation.
- Open an account: Visit the website or mobile app of the fund house you want to invest in. Follow the instructions to open a mutual fund account. You will need to provide the required KYC documents and complete the registration process. rs 500 sip mutual funds
- Set up a SIP: Once your account is opened, you can set up a SIP by selecting the desired fund and entering an investment amount of Rs 500. Choose the investment frequency, such as monthly, and choose the start date of your SIP. rs 500 sip mutual funds
- Provide bank details: Link your bank account to your mutual fund account by providing the required bank details. This will allow automatic deduction of the SIP amount from your bank account.
- Monitoring and Review: Keep track of your investments and review the performance of your mutual funds regularly. Make any necessary adjustments in your SIP amount or fund selection based on your financial goals and market conditions. rs 500 sip mutual funds
Tips for Successful SIP Investing with Rs 500
Here are some tips to make the most of your Rs 500 SIP investment:
- Stay committed: Stick to your SIP investment plan and avoid pausing or pausing your investments unless absolutely necessary. Stability is important to achieve the benefits of rupee-cost averaging.
- Increase SIP amount: As your income increases, consider increasing your SIP amount to accelerate your wealth creation. Many fund houses offer the option to increase your SIP amount from time to time.
- Diversify your portfolio: Spread your investments across different mutual fund schemes to diversify your risk. Consider investing in a mix of equity, debt and hybrid funds depending on your risk appetite.
- Review fund performance: Monitor the performance of your mutual fund investments regularly. While short-term fluctuations are common, evaluate the long-term performance and stability of the fund.
- Seek professional advice: If you are unsure about choosing the right mutual fund or need guidance, consult a financial advisor who can provide personalized recommendations based on your financial goals and risk profile.
Final Thoughts
SIP starting with Rs 500 in mutual funds is a great way to start your investment journey. It allows you to develop the habit of regular saving and investing even with small amounts. Over time, your investment can grow significantly due to the power of compounding. Remember to choose funds wisely, review performance regularly and stay committed to your investment plan. With patience and discipline, you can build a larger corpus and achieve your financial goals. rs 500 sip mutual funds
Frequently Asked Questions
How much can I invest via SIPs?
You can start with a minimum investment of Rs 500 in SIPs. However, you can choose to invest a higher amount based on your financial capacity and investment goals.
Can I miss paying SIP for a month?
While it is advisable that you remain committed to your SIP investments, some fund houses may allow you to skip SIP payments for a month. However, it is important to check with your fund house and understand their policies regarding missed payments.
What are the different types of SIPs?
There are different types of SIPs available to suit the needs of different investors. Some common types include regular SIP, step-up SIP (where the investment amount increases periodically), and flexible SIP (where the investor can choose to increase or decrease the investment amount).
Disclaimer: Fund Gyaan’s information is provided solely for educational and informational purposes. This is not financial advice, and we do not guarantee the accuracy or timeliness of the information. Investing in the stock market and mutual funds involves risk, and past performance is not indicative of future results. Consult a qualified financial advisor before making any investment decision and remember that all investments carry risk. We are not responsible for any investment decisions made based on our information.
