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Fincash » Mutual Funds » How To Save Money in SIP

How to Save Money by Investing in SIP?

Updated on November 26, 2020 , 4497 views

How to save money? This is the most common question that has kept people curious over the years. As a matter of fact, the most difficult part about saving money is getting started. It gets hard for people to determine simple plans to invest money and how to start saving in those plans to meet their Financial goals. If you are in a similar situation, you must consider some money savings tips and then make your decision.

How to Save Money Every Month?

You do not need to have huge sums of money to start Investing. There are other simpler ways for you.

SIP-Investment

  • Invest in SIP. SIP or a Systematic Investment plan is one of the best ways of investing your money.
  • SIP is a one-time investment option with which you can invest monthly to earn good returns on your investment.
  • The minimum amount of investing in a SIP is as less as INR 500, which makes it one of the most convenient investment options for even a youngster.

How to Save Money Via a SIP?

Generally, there are certain goals according to which people start investing. Some of the basic goals are mentioned below.

1. SIP Helps in Tax Saving

As you start earning, the first thing you want to know is how to save money from tax deductions. Though there are many ways to save tax, SIP is one of the most convenient ones.

By investing through SIP the money gets deducted in regular intervals, so there is no burden of a lump sum investment.

Also, the SIP investments are liable for deductions under Section 80C of the Income Tax Act. So, all your questions about how to save money from taxes have found a solution. By investing in a SIP, one can save somewhere between INR 15,000 to INR 45,000 in taxes per year.

2. SIP helps in Child's Education

Since the birth of your children, you should start planning for their future, that includes education, marriage etc. But how to save money for making investments is your question, right? The solution is simple and quite convenient.

invest in Mutual Funds through SIP. As you know, SIPs invest a small amount for regular intervals, it very convenient for people.

Additionally, SIPs work the best for long-term investments, that further makes it beneficial for you to save money for your child. So, don’t just linger on how to save money, just invest in a SIP and you are done.

3. SIP assists in Retirement Planning

Planning for retirement is one of the essential parts of financial goals. An appropriate Retirement planning is when you know how to save money and where to invest your savings.

There are various investing options that help you on how to save money. These plans include Provident Fund (PF), National Pension Scheme (NPS) etc.

But, one of the best money saving plans is a Systematic Investment Plan. It invests your money in growth assets and helps you create a powerful corpus for your retirement.

For example, let’s suppose you earn INR 30,000 per month at the age of 25 and invest INR 2500 per month in a SIP, increasing it by 10% every year, your savings would be the following-

Know Your Monthly SIP Amount

   
My Goal Amount:
Goal Tenure:
Years
Expected Annual Returns:
%
Total investment required is ₹7/month for 20 Years
  or   ₹514 one time (Lumpsum)
to achieve ₹10,000
Invest Now

  • At the age of 60, with the balanced return of 12% per annum, you will earn INR 4.12 crores
  • At the age of 60, with the balanced return of 15% per annum, you will earn INR 7.2 crores

Therefore, when deciding how to save money for your retirement, make sure you invest in SIP.

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Best SIP Funds that will Help to Save Money

Some of the best and top performing SIP funds that will help you to earn good returns from your savings are:

FundNAVNet Assets (Cr)Min SIP Investment3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2019 (%)
Franklin Asian Equity Fund Growth ₹30.1759
↑ 0.13
₹198 500 10.337.828.110.31428.2
SBI Small Cap Fund Growth ₹66.9168
↑ 1.53
₹5,424 500 12.256.2254.815.56.1
DSP BlackRock US Flexible Equity Fund Growth ₹33.9499
↑ 0.14
₹253 500 7.624.224.116.31427.5
Principal Emerging Bluechip Fund Growth ₹123.93
↑ 1.59
₹2,120 100 11.741.316.14.212.76.8
Aditya Birla Sun Life Small Cap Fund Growth ₹34.6093
↑ 0.97
₹2,197 1,000 14.161.914.2-76.4-11.5
Kotak Equity Opportunities Fund Growth ₹142.151
↑ 1.47
₹3,885 1,000 12.137.1136.611.913.2
Axis Focused 25 Fund Growth ₹34.49
↑ 0.18
₹11,895 500 14.941.912.810.714.814.7
IDFC Tax Advantage (ELSS) Fund Growth ₹60.71
↑ 0.56
₹2,235 500 10.346.510.51.99.71.9
L&T Emerging Businesses Fund Growth ₹24.836
↑ 0.63
₹5,271 500 12.355.110-3.110-8.1
L&T India Value Fund Growth ₹39.028
↑ 0.33
₹6,197 500 10.241.28.919.14.6
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 27 Nov 20

By now you know how to save money through a SIP. So, if you are also planning to save money for the above-mentioned reasons or just want to save money anyway, make a SIP investment now. Save money, live better!

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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