Missed Mutual Fund SIP dues? You may lose out on potential market gains
Systematic investment plans (SIPs) have gained significant traction among investors seeking a disciplined approach to wealth creation. While SIPs offer numerous advantages, failing to pay the dues on time can have serious implication for an investor’s financial well-being.
SIPs thrive on the power of compounding, which is substantially hindered when payments are delayed. By falling behind on payments, investors miss out on the opportunity to capitalise on market movements and take advantage of favourable investment conditions.
An SIP is an investment method where investors regularly invest a fixed amount of money at predefined intervals into mutual funds. Consistently paying your SIP ensures that your investments continue to grow and benefit from the compounding effect. Compounding allows your money to generate returns on both the principal amount and the accumulated gains. Failing to pay your SIP on time may have the following impacts:
The mutual fund house will not deduct the amount from your bank account if there are insufficient funds. As a result, your SIP may get cancelled and you funds may not grow as per your expectations.
When you miss your SIP payment, the scheduled investment for that particular period is missed. As a result, you lose the opportunity to invest at the desired time, potentially missing out on any potential gains or favourable market conditions that could have benefited your investment.
Adhil Shetty, CEO, Bankbazaar.com, says, “A systematic investment plan (SIP) means repeating small steps hundreds of times over the long term, breaking down a tough investment goal into small, achievable monthly goals. Failing to pay your SIP means your financial goals which you want to achieve through your
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