Systematic Investment Plan

What is a Systematic Investment Plan? Its Benefits

A systematic investment plan is a financial invest offered by various mutual funds, allowing investors to invest small sums of money each month rather than large sums at regular intervals. The duration of the investment may vary depending on how often the funds to make a withdrawal. The frequency of this withdrawal is typically weekly, bi-weekly or monthly. The purpose of the investment is to accumulate large amounts of savings over a long period of time.

If you have been saving money for quite some time, then this method may not be suitable for you as there will be a regular withdrawal from the account. In such case, you should opt for an automatic investment plan, where the money you save is invested in a fixed rate. This will ensure that your money is safe and secure. The fund management company of your selected fund allows you to choose a regular withdrawal amount or a higher amount if you wish to do so. Withdrawal amount is determined on an annual basis or a semi-annual basis.

Feature of Systematic Investment Plan

The best feature about the investment plan is that it is flexible and can suit all people irrespective of their earnings capacity. The investments are made with a high degree of security, and the management team of the fund has the knowledge and expertise to carry out the entire process efficiently. You may also take the assistance of the financial advisors of the fund to manage your money properly.

In order to select the right investment plan for your needs, you should first know what type of portfolio you want to create. You should make sure that you are investing in a safe and stable investment vehicle. It is better to start off with a simple savings scheme and after some time, you can increase your investments. The best time to start investing in your chosen fund is when you are still earning a good income.

When you open an account with the fund, there will be a minimum withdrawal amount. Make sure that you stick to the schedule laid down by the fund management company. There is no need to keep making the withdrawal amount until you run out of money. Once your balance grows, you can increase the withdrawal amount. Once the balance reaches a certain level, you may find it difficult to continue with the plan, which will result in a withdrawal of your account.

Systematic Investment Plan

To avoid withdrawal, you may have to make regular withdrawals at regular intervals. You must always remember to pay your maintenance fees and commissions on the fund, as these expenses can result in a withdrawal of the funds, which will have to be recovered later. If you are not earning enough, then you can sell some of your stocks, but make sure that you sell those stocks, which have not shown any profit for at least four to five years.

If you want to make it big in the stock market, then it would be ideal for you if you can find a good systematic investment plan. This is especially important when you are just starting out and are unable to generate a lot of money through stock trading.

The concept behind a systematic investment plan is that you buy a security that is known to have a high probability of increasing. The main advantage is that you know exactly what the market will be doing. You can be assured that your investment will always yield profits. The best part about this system is that it has a lower chance of failure compared to random trading.

How does a Systematic Investment Plan Work

To start with, you have to identify a particular type of investment that you are interested in. For example, you could invest in an oil exploration company. Once you have chosen a particular type of investment, then you can go ahead and purchase the securities that you like from them.

Next, make sure that you read the prospectus and research thoroughly on the particular investment. Make sure that the information given in the prospectus is not only reliable but up-to-date. This way, you would not be misled into buying securities that have changed in the last few years. Also, find out which investments are safe and have a low chance of loss. These securities are usually known as long-term investments.

The next thing that you need to do is to set a goal and then stick to it until you have made enough money in the stock market. Do not worry too much about the initial period because most of these plans only last for around two to three years.

In addition, it would be helpful if you join some seminars or events that teach people how to invest. You should do your research well, so that you can learn the strategies in the right way. In this way, you can also get ideas and tips from these professionals. This way, you would be able to save time and learn new strategies quickly. However, do not spend too much time learning strategies that are outdated.

You should also have a plan for your retirement. Do not invest all your savings in stocks and money. You can also invest in real estate, mutual funds or in some stocks and bonds.


In summary, one of the most important aspects of a systematic investment plan is that you do not get carried away by the market. Instead, you keep your mind focused on your goals and stick to it. The market may be very volatile at times but if you stick to the plan, you can earn huge profits in no time.

In order to make sure that your investment scheme is a worthwhile one, you should also look at the financial statements of your investment scheme. You should also read the annual report from the broker that you are using. This way, you can identify possible mistakes.

One of the best things about a systematic investment plan is that it takes into consideration your personal situation and circumstances. This way, you will know what is realistic for you and what could lead to huge losses. This will ensure that you do not fall into any traps.

Another benefit of a systematic plan is that it allows you to invest without going through the stress of choosing stocks, shares or bonds. You also do not have to worry about which type of security to invest in.

Overall, you will find that there are many advantages of making use of a systematic investment plan. This includes not worrying about the stock market and its fluctuations and being able to invest with relative ease. These are just some of its benefits. So, start making use of this investment plan today and enjoy its rewards.