What is the difference between Mutual Fund and SIP?

What is the difference between Mutual Fund and SIP?

Mutual Funds are investment instruments that collect investors money and invest in various securities in order to get returns on the investments. The money invested is managed by a professional fund manager.

SIP is just a way of investing a fixed amount in mutual funds on a regular basis. You are allocated a certain number of units based on the ongoing market rate (called NAV or net asset value) for the day.Every time you invest money, additional units of the scheme are purchased at the market rate and added to your account. Hence, units are bought at different rates and investors benefit from Rupee-Cost Averaging and the Power of Compounding.

You can also invest in mutual funds as a one - time investment which is also called lumpsum. Every mutual fund scheme is available in two variants - direct and regular. Direct schemes are bought directly from the AMC and do not involve any intermediary.

Direct schemes have a lower expense ratio since no commission is paid to the distributor. So you get more returns compared to regular schemes.


    • Related Articles

    • How to add funds in the Mutual Fund Ledger?

      You can add funds in the Mutual Fund Ledger using the following ways: 1. UPI You can add funds using UPI ID linked to the selected bank account. There are no additional charges for payments through UPI. Follow the steps: Login to 5paisa Mobile App >> ...
    • Can I get Limits to trade against my Mutual Fund Holdings?

      Yes. You can. Depending on the type of mutual funds and their features, we have categorized Schemes, where the holdings can be used to give you an additional limit to trade in Equity markets. The limit provided will be a percentage of the holding ...
    • How can I start an SIP and can I shift my existing SIPs to 5paisa?

      Investment in SIP can be done via below platforms:  From 5Paisa Mobile App: Start an SIP by choosing schemes from our categorized baskets: Select a scheme >> Click on start SIP >> Enter amount and SIP Date >> Select SIP Period >> Proceed to Pay You ...
    • How can I make Lumpsum Investment in Mutual Funds?

      Make a lumpsum investment  by choosing schemes from our categorized baskets: ​ From 5Paisa Mobile App:  Select a scheme >> Click on Buy >> Enter amount >> Proceed to Pay You can make a lumpsum investment through Quick Buy/SIP in a scheme of your ...
    • What Brokerage does 5paisa Charge? How does 5paisa make money in mutual funds?

      5paisa does not charge customers any brokerage for mutual fund orders. There also, no processing fees and account opening charges for customers on 5paisa. 5paisa directly get incentivised from the Asset management company for distributing the AMCs ...