Investment: SIP or Lumpsum, which is right for investing in a Mutual Fund? What should you choose..

Today, people are increasingly including mutual funds in their portfolios. It gives a minimum estimated return of 12 to 14 percent. Two options for investing in mutual funds are quite popular. These include both Lump Sum and SIP (Mutual Fund SIP vs Lump Sum).

First, let's know about both of them. Then we will know which will be the better option for you.

What is Mutual Fund Lump Sum?

Lump sum means collecting a lump sum. You can invest a lump sum of money in any mutual fund. For this, you need a large amount. It is like buying shares. After investing once, if you want to invest in the same fund again, you can do so. There is no time limit in this.

What is a Mutual Fund SIP?

SIP (Systematic Investment Plan) is the easiest way to invest in mutual funds. Today, everyone is aware of SIP. Through SIP, i.e., Systematic Investment Plan, you can invest money in mutual funds in installments.

Today, you can start SIP with just Rs 100. Apart from mutual funds, you can also purchase ETFs and shares in SIP i.e., installments. You get many types of facilities in a mutual fund SIP. Like increasing a fixed amount in a fixed time through a Step-up. Along with this, you can also stop this SIP in case of a financial crisis.

You can invest in any equity, debt, or hybrid fund through SIP. Along with this, you can decide the investment amount according to your salary.

What is better for you?

If a person has a good understanding of the stock market. Along with this, he wants to invest a large fund, so he can choose the option of a mutual fund lump sum. Now the question arises, what is the difference between buying a share and a mutual fund lump sum?

Under mutual funds, you are paying a lump sum amount like shares, but in this you are not investing in a single share but in different asset classes. Asset classes include equity, bonds, debt, real estate, etc.

But if you do not want to take much risk and do not have any knowledge about the stock market, then you can choose the option of SIP.

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