Skip to main content

How To Start a SIP - Direct Plan or Regular Plan


Welcome to Amazing Adviser and in this article I'm going to tell you how to start a SIP or systematic installment Purchase. If you don't know what is SIP you can check this link here.

What is SIP? It's Advantage and Disadvantage

You must possess PAN Card to start SIP. There are two ways. (i) Direct Plan (ii) Regular Plan. Let's understand what are these.


  1. Direct Plan - In direct plan you buy SIP directly from a company. In simple language I explain it as love marriage because no one will guide you, no one will inform you, no one will ask you for Direct SIP. You choose on your own, you invest on your own and you exit on your own. No one will interfere between you and your money. You can visit any company website who are providing SIP and directly purchase from there. Example of Direct Plan providers are Zerodha, Paytm money, MyCAMS
  2. Regular Plan - Opposite to this, Regular plan means you will invest or purchase SIP through a middle man, normally known as broker or agents or mutual fund distributor. Oh yes, this is arranged marriage where many peoples are interested in your investment. Basically they earn a commission from the company for your every rupee of investment. In addition to that they earn commission when your investment grows over time. If anyone has ever asked you to start a SIP then he is telling you about Regular Plan and not Direct Plan.
Frankly speaking always invest through Direct Plan.I don't think you want to give your money to other person for free. Company give commission from your profit to the mutual fund distributor and agents. I'm giving an example that how choosing between Direct and Regular can affect your investment.

There is a fund called ABSL Tax Relief 96 fund. Talking about it return in last year you would have got 18.2% in Direct plan whereas 16.8% in Regular plan. So if you had invested ₹100000 then the difference between both plan's return is ₹1400. That means this ₹1400 is the commission your agent earns from your investment. 

In the end it is always your decision that how you want to invest in SIP and mutual funds. There may be some other reason that people prefer regular plan. But in my opinion direct plan is the future of mutual fund industry. With awareness more and more people will invest through Direct Plan.

Thank you
Happy Investing

Comments

Popular posts from this blog

Success Story Of Colgate, One Of The Bestselling Toothpaste Brand

Success Story Of Colgate, One Of The Bestselling Toothpaste Brand
"It cleans your breath while it cleans your teeth", can you guess whose slogan is this. If you have guessed correct then today I'm going to tell you the success story of one of the best selling toothpaste brands of India i. e. Colgate. It's popularity can be measured by thousands of situations where the term toothpaste is replaced by Colgate in India. Do you know, this brand came into being almost 210 years ago, introduced by Williams Colgate. And initially, this company used to produce soaps, not toothpaste that too in jars and not tubes. So now, let's get back to the beginning of the story. 

Also Read
Success Story Of Haldiram Bujhia
Success Story Of AmulHow Maggie Became Successful?
The founder of Colgate, Willam Colgate was born on 25 Jan 1783 in England. His father was a farmer. 
But later, they shifted to Maryland in the US where his father along with a friend began to make candles and soaps. Unfo…

What is SIP? It's Advantages and Disadvantages

Hello friends, in this post we are going to discuss about SIP, its advantages and most importantly which no one will say you, its disadvantages.



So imagine what we used to do in 90's when we were kids. People had piggybanks but I personally had a small box where I used to put coins whenever I get money. There was a lot of emotions behind that and specially I used to fight whenever anyone touched my box. Imagine how our grand parents were saving money. The -most common sources were
Fixed Deposits(FD)Recurring Deposits(RD)If I will explain the true meaning of SIP then it will be similar to Recurring Deposits. SIP is modern era's RD. So what does SIP do? In SIP a professional invest money in capital markets on behalf of his/her clients. It's as simple as that. It's as simple as planting a small tree. It is as simple as taking care of your small baby.

Advantages of SIP:-


Safe From Market Fluctuation - One of the most important and remarkable advantage of SIP is, it saves yo…

Inspirational Story Of SONY, The Japanease Giant

Hello friends, today I'm going to discuss one of the most popular Japanese Multinational Corporations - Sony. It is such a famous company that people blindly believe its products by its name. And why not? There is hardly any product that would dissatisfy the customers. When it comes to the sound system, Sony stands out of the crowd. 

Also Read
Successful Story Of BMW
Success Story Of Rolls Royace
Success Story Of Jaguar
According to 2016, Sony is the fifth largest television manufacturing company in the world. The whole world of Sony is divided into various groups like Sony pictures, Sony finance services, Sony Mobile etc. Now let's get to know the success story of Sony from the beginning.

The story started with the World War when Ibuka and Morita two men were following their dreams. Ibuka was running a radio repair shop in Tokyo when he met Morita, 13 yrs younger to Ibuka. Then, both of them decided to start a business. And then taking a loan of 500 dollars, they started Tokyo Tele…