How to do Systematic Investment Planning (SIP) during COVID-19?


How to do a SIP during COVID?

SIP is a great way to tackle the COVID-19 induced market crisis. This year has witnessed a number of market corrections, right from the start. Panic ridden investors are pausing their SIPs, stopping them, withdrawing money and doing what not. Here’s a little reality check: As per industry experts, their actions are the exact opposite of what they should be doing right now. While we understand the panic and the overall sentiment behind the actions, we urge you to consider the exactly opposite way, that is, to invest more into your SIP.

Before that, let’s talk a bit about investments in general:

Starting an Investment

As Indians saving money is the vital skill we all have. It is a very important skill, but does it let our money grow? Do we Indians know enough about investment? To convert all your dreams into reality, you need determination, hard work and most importantly money. How to save enough money to make your dreams a reality? You need an investment!

An Investment is the purchase of goods that are not consumed today but used in future to create wealth. In finance, an investment is a monetary asset purchased with the hope that the asset will provide income in the future or will be sold at a higher price; basically what we can say in layman Language is save & earn.

What is a Systematic Investment Plan (SIP)?

Systematic Investment Plans are investment plans where we don’t invest a huge amount of money altogether, rather invest small amounts periodically. Mutual Fund Investments are good examples of systematic investment plans. In today’s world, a lot of online investment apps are making it easier for people to save, invest and prosper.

Systematic Investment Plans are very similar to depositing money in a bank with a particular interest the only difference is your money is deployed in a mutual fund scheme, with a particular interest is subjected to market risks. Mutual Fund often works on the principle of automated savings.

Why should you invest in a SIP during COVID?

Are you considering to draw your money out from your long running SIP because the market is plunging?

Are you pausing your regular investment in a SIP because you feel it’s the right thing to do during the COVID affected times?

Is the whole investment space scaring you so much that that you are withdrawing money from not just SIPs but also other equities, debt, liquid, gold funds?

If you have answered YES to any of the above questions then you should STOP right now. It’s time for a major reality check.

If you are considering to pause or stop any of your investments in SIP then you should know that this is the perfect time to max out your investments in certain classes, especially equities. Remember that the number of units of a particular fund that you will be able to buy at the same price, will be much higher right now. Reason being, the prices of funds is low, in fact it’s lower than it has ever been in years. 

It is also a good time to start a SIP in the present state due to the same reason above. You will be able to buy units at a lower price and can sell them in the future at a much higher price. In short, milk out the most from your SIP investments . Also, there are a few other asset classes that you should invest in during COVID and make huge profits later on when the markets are restored.

Start your SIP

SIP is a disciplined way to reach your goals

Invest Now

Advantages of SIP

But, why SIP? Here’s a list of reasons why you should be investing in a SIP during COVID:

SIP makes you regular with your savings.

Systematic Investment Plans will make you regular with your savings. They are investments based on a simple perspective of investing regularly which enable us to build wealth for a long time. In case of SIPs, on a specific date which can be daily, weekly, monthly, quarterly, a fixed amount as desired by you is debited from your account and invested in the scheme. as selected by you. Hence. SIPs really invoke discipline into you so that you can save enough money to reach all your goals.

Systematic Investment Plan is not heavy on your wallet.

Systematic Investment Plan is not heavy on your wallet since it believes in periodical automated Savings (A type of personal saving system in which the plan contributor automatically deposits a fixed amount of funds at specified intervals into their investment account). SIP doesn’t cut a hole in your wallet, and that’s probably the best thing about it. SIP enables you to invest in smaller amounts at regular intervals. This, in turn, reduces your burden of withdrawing a lump-sum from your bank account.

Let your dreams to come true.

It’s an effective medium for goal planning. For example, we all want to buy a dream car, save for the education of our children, want to build a dream house, and of course, retirement is obviously waiting for all of us. So, the only way to build up our dream is by saving and investing. Very often many invest in the equity market, with a motive of short time gains, and often ignore to use the equity for long time growth.

SIP helps you to compound your money.

A SIP subscribes you to the habit of investing regularly and in process, it enables you to compound your invested money. For example, with Sqrrl Away you can invest Rs 500 per week and see it grow anywhere between 6% to 7% that’s compared to 4% in a standard bank account. Sqrrl is one of India’s best money saving apps and one that will definitely not let you down.

So, these are the basic information that we need to know about why should you invest in a SIP during COVID and otherwise as well. This information about how to save money and how to save & earn on our investments is what we should know before planning to start a mutual fund investment.


Download Sqrrl from the Apple App Store & Google Play Store and start to SqrrlAway!

Written by

Vedant Kaushik