Mutual funds are the best investment option for many people. Similarly, SIPs are one of the best tools for investing in mutual funds. They allow you to invest smaller amounts over regular intervals instead of a large amount at once. Moreover, they enable you to invest as little as INR 500 in one installment. They also ensure that you build a discipline of investing.

SIPs also average out the purchase cost of units in mutual funds when you invest regularly. This makes managing your money easier and makes you a bit immune to price fluctuations. These features make it one of the superior investing methods, and many investors and experts agree. However, as with everything in life, there is always something better. In this case, the better option proves to be a ‘Smart SIP.’


What is a ‘Smart SIP’?

SIPs are considered the ‘smart way to make investments, something referred to as a ‘Smart SIP’ and something every investor should look into. The principle of an intelligent SIP is similar to that of a regular SIP. However, the investment angle of the entire process is refined to make investment more manageable. A thoughtful SIP allows you to lower your installment value if the market goes up. Similarly, it will enable you to go for a higher installment value if the needs go downward. But, if the market is experiencing downtime, you can use this opportunity to invest a higher amount and buy more units.

This way, you buy units at a lower price and get returns as they return to normal. Similarly, you can save money by investing less if the market increases. You may not be buying the number of units you regularly do, but you do not have to pay a higher price for the same number of units. It is an active and dynamic way of investing in mutual funds. Moreover, this lowers your average purchase cost, making it a less risky, high rewards situation. Many mutual funds in India offer this facility to their existing and potential investors. In this facility, you can determine a minimum and maximum investment amount. As an investor, you can move along this range based on the market conditions.

Advantages of ‘Smart SIPs’

Following are some of the advantages of intelligent SIPs:

Situation-based investing

Any investing has its advantages and risks. The same applies to SIPs. While they may offer you the benefit of shorter investment amounts and compound, among many others, it also has their share of risks. In a regular SIP, investments are made in a selected list of funds that may prove profitable to you. However, a Smart SIP considers the market’s situation before deciding where your money should be invested. For example, using an intelligent SIP, you can invest in liquid funds at a time of higher risk.

Higher focus on safety

A thoughtful SIP sets a list of parameters to determine how valuable and profitable a scheme can be for you. Moreover, it looks into the fund’s net asset value to check the risk status of investing in it. If investing in a particular fund is unsafe, it will be replaced by a safer option. If no safer alternative is available, your money will be put into liquid funds. On the other hand, if a particular fund is secure, your money will quickly be invested in it. Either way, your money will most likely be safe with the scope to grow. Be smart and invest in mutual funds via smart SIPs. Remember, the sooner you start, the more you benefit from the power of compounding. Happy investing!


I am a writer, financial consultant, husband, father, and avid surfer. I am also a long-time entrepreneur, investor, and trader. For almost two decades, I have worked in the financial sector, and now I focus on making money through investing in stock trading.