SIP Made Simple: Best Mutual Funds for a First-Time Investor in 2024

A SIP or systematic investment plan is perhaps the most widely used method for a first-time investor to enter the mutual fund arena. Under this plan, one can invest small amounts, and they ensure that it becomes possible to get manageable returns over time without requiring large upfront costs. There are SIP options galore available from Bajaj Finserv, which can suit the needs of the new investor. Give here some of the best mutual fund SIP for beginners' mutual funds 2024, with a few tools and strategies that make it easy and easy to invest in SIP.

What is an SIP?

The SIP or Systematic Investment Plan is an investment approach that facilitates investors in adding fixed amounts on a regular basis to a mutual fund. This investment method does not require a big sum of money to invest but allows the investor to garner a corpus gradually. Additionally, investing at intervals through SIP offers a prospect for reducing the volatility shock through rupee cost averaging.

SIPs are cheap and flexible, which makes it easy for new investors to manage and track their investments easily via the website of Bajaj Finserv.

This also allows beginners to invest in SIPs with small amounts, so that gradually, they increase the contribution towards building an excellent base for future wealth.

Why SIPs are Ideal for Beginners

SIPs best suit beginners because they allow disciplined investing without the need for sophisticated market knowledge. Here's why SIPs are something most new investors would benefit from: 

● Lower Entry Barrier: SIPs enable beginners to invest with small sums of money easily, so a relatively modest financial commitment is not required to kick start.

● Rupee Cost Averaging: acquires more units when the prices are low and fewer when prices are high; reduces the overall cost of investment

● Flexibility: The investor can opt on how much to invest, stop investing if an immediate need arises, or increase investments with the rise of income.

● Compounding benefits: Periodic investments into mutual funds would make returns earning further returns that aid in the process of wealth creation over time for investors at the beginner's level. 

Bajaj Finserv Best SIP Options for New Investors in 2024

Bajaj Finserv has picked some of the best mutual funds to invest through SIP for first-time investors who come out in search of a good prospect but where there is minimal risk. Here are three of the best SIP options for new investors in 2024-

● Equity Large Cap Funds

Large Cap Funds invest in the top 100 companies by market capitalisation, which are stable. To a new entrant, these funds balance growth and stability, since large-cap companies are relatively less volatile than the mid-cap or small-cap stocks.

Sample Fund: Bajaj Finserv Large Cap Fund (representative)

Risk Level: Moderate

Investment Horizon: 5+ years

● Hybrid Aggressive Funds

Hybrid Aggressive Funds invest a combination of equities and debt instruments to offer both growth and income exposure. The same balance avails capital appreciation potential with the protection of a decline in the equity market through debt investment. Hybrid Aggressive Funds are quite apt and diversified for a newcomer with lower risk compared to pure equity funds.

 Example Fund: Bajaj Finserv Balanced Advantage Fund (for illustration)

Risk Level: Moderate

Investment Horizon: 3-5 years

● ELSS (Equity-Linked Savings Scheme)

The ELSS funds primarily invest in equities and offer tax-saving benefits under Section 80C of the Income Tax Act. With a lock-in period of three years, ELSS funds also encourage long-term investment. For beginners, they make for an ideal entry into equity markets while further reducing taxable income, making them a double-benefit investment.

Example Fund: Bajaj Finserv Tax Saver Fund (illustrative)

Risk Level: High

Investment Horizon: 3+ years

These SIP options from Bajaj Finserv are the best of the lot for a beginner, as they are presented in a wide variety to cater to all kinds of goals and risks. This puts beginners on the right path.

Utilising the MF Calculator for Planning SIPs

Utilising the MF Calculator is easy; it is indeed one of the efficient tools presented by Bajaj Finserv for investors to determine returns and create realistic financial goals. Here's how to utilise the MF Calculator in the right way:

● Enter Monthly Investment Amount: Mention the SIP amount you wish to invest every month. It is the basis of calculation of the estimated returns.

● Expected Rate of Return: Place the expected return on rate on the type of fund you have selected. For example, equity funds may be more projected in returns as compared to debt funds.

● Investment Period : Specify the duration for which you are expecting to continue SIP. A long tenure fetches higher gains as the compounding power starts playing. Leads

● Computed Maturity Amount: The MF Calculator computes a premature maturity amount based on inputs so that beginners understand their investments over time.

Using the MF Calculator, first-time investors can easily set their goals, whether for a down payment for a house, education for themselves or their children, or financial security in the future. This way, it helps investors make the right investment decisions that fit in with their objective.

Why Bajaj Finserv's MF Online Platform is Ideal for Beginners

The MF Online platform of Bajaj Finserv is perfect for starting and managing a SIP. Convenience, indeed. A portal to track investments, monitor the performance of SIPs, and modify as needed. Here's why the online platform of Bajaj Finserv's MF Online platform is ideal for new investors:

● Ease of Access: Investors can open an account, opt for funds, and initiate SIPs entirely over the internet. Less hassle, lesser time wasted.

● Transparency: Bajaj Finserv's site has all the information about the funds, past performances, and risk levels that will ensure beginners make correct investment decisions.

● Flexibility and Control: There is an option to change SIP amounts; one can switch from one scheme to another or even put a pause on the contributions. This allows complete control of a beginner's investment.

● Educational Resources: Educational resources, guides, and tools such as the MF Calculator can be accessed on the site to ensure beginners can make informed investment decisions confidently.

Conclusion

It is very intimidating to take the first step towards investment. However, SIPs have made it possible for new entrants in mutual funds. Bajaj Finserv has taken the burden off the head of the investor by breaking down the preferred SIPs in 2024 into three categories, that is, Large Cap Funds, Hybrid Funds, and ELSS, all giving the investor the perfect balance between growth and risk management.