Tata AIA SIP Plan

The Tata SIP plan allows the investors to select the frequency period of paying the installment, which could be on a monthly, quarterly, or annual basis. However, the investor is required to be consistent with his installment. In addition, the scheme must be coherent with the financial planning of the investors.

Let us understand the benefits of the Tata SIP plan.

Benefits of the Tata SIP Plan

Listed below are the key benefits of the Tata SIP plan.

1. Discipline and Consistency

   The Tata SIP plan brings consistency wherein the investor must pay the premium charge at a stipulated time. Further, it ensures discipline from the end of the investor in order to fulfill his financial goal. By purchasing the Tata SIP plan, the investor gets committed to saving a certain sum to make the investment at a due date.

2. Flexibility

   The Tata SIP plan offers investors the flexibility to discontinue the investment if they are going through a financial crisis. In addition, it does not have any lock-in period by which the investor is restrained not to withdraw his sum or to quit making investments. Further, the investor may increase or decrease the installment amount according to his financial conditions.

3. Long Term Gains

   The Tata SIP plan provides a long-term investment planning option in order to generate a significant fund to meet the financial goal of the investor. It shows the benefit of rupee cost averaging, where an investor may benefit from buying more units if the market performance is low. In addition, he may buy less if the market performance is high. Rupee cost averaging is also considered an inherent feature of SIP.

   Additionally, the Tata SIP plan shows the power of compounding. The investor invests a small or large sum which fetches a better return compared to traditional or conventional plans. Moreover, the investor invests on a monthly, quarterly, or annual basis, which ensures the growth of returns with an increment of funds.

How to Invest in Tata SIP Plan?

It is essential for an investor to learn about the meaning and significance of a SIP plan in order to invest. Further, every investment plan includes a sort of risk that should not be avoided by the investor. Hence, he must get acquainted with his risk appetite. Listed below is the step-by-step guide for an investor to invest in Tata SIP Plan.

1. Financial Objective

   It is crucial for an investor to analyze his financial goal before making an investment in a SIP plan. The investor may determine the tenure and premium amount only after examining the financial objectives behind investing in the Tata SIP plan. In addition, the investor must consider the fund requirement for a specific intent by deciding the timeline, inflation rate, and rate of returns.

2. Mutual Fund Company

   Later the investor may contact a financial institution, such as a broker or a bank that offers mutual funds. First, the investor needs to decide on the mutual fund based on his risk appetite. Further, the investor must analyze the (AMC) Asset Management Company record, such as its performance, rate of returns, Net Asset Value (NAV), expertise, etc., of the fund scheme.

3. KYC Process

   The investor needs to complete the KYC process in order to invest in the best Tata SIP plan. The process of KYC can be completed online. One can provide address proof, identity, Aadhar card, and PAN card details to complete the KYC. In addition, the person also needs to complete the verification of him, which can also be accomplished online. Upon completion of the KYC process, the investor may create an account with the fund house.

4. SIP Details

   In the next step, the investor needs to provide the SIP details after completing the KYC process. The details include the period or frequency of paying the installment, which could be weekly, monthly, quarterly or annually. Further, the investor must provide the investment period and the specific amount. Lastly, the investor may also opt for the option of auto-debit to make the payment automatically and without remembering the due date.

5. Start Investment

   After providing details, the investor may start investing in the Tata SIP plan, and the investment portfolio can be accessed by logging in to the SIP account.

Tata SIP Calculator

One can calculate or estimate the return on the investment by utilizing the calculator dedicated to the Tata SIP plan. In order to calculate the SIP returns, the investor needs to select the monthly investment amount along with the expected growth rate. In addition, he is also required to select the duration of the investment plan.

Let us understand the aforementioned terms in detail.

1. Monthly Investment Amount

   The monthly investment amount refers to the sum an investor can potentially pay from his savings. However, the Tata SIP plan provides the discretion to choose the frequency. Hence, the investor may also allocate funds on a quarterly basis.

2. Expected Growth Rate

   Generally, the growth rate or rate of interest, on an annual basis, varies from 9 percent to 18 percent. However, 12 percent is known as the average growth rate. At the same time, 10 percent and 14 percent are known as below and above-average growth rates, respectively.

3. Investment Duration

   It refers to the timeline or the duration for which the investor decides to stay in the Tata SIP plan. The course may vary from one year to fifty years.

Conclusion

One cannot create a significant fund in a day or a month. Therefore, the investor needs to be consistent and diligent with his investment planning. In addition, he must plan for specific goals by analyzing the interest and inflation rates. An individual cannot accumulate significant wealth by earning a monthly salary. Investment is an effective way to generate a considerable return. In addition, the investment made in the Tata SIP plan ensures double returns compared to traditional plans. Hence, the investor must select the right category and choose the worthwhile scheme in order to meet the financial goal of the future. To get the better idea of SIP plans, it is suggested to study the best SIP plans in the market before investing.