This website including the ‘[EduFund]’ platform is owned, operated and maintained by Helena Edtech Private Limited, a company incorporated under the laws of India. The platform and the services thereunder are provided on an "as is" basis. Use of the service and the platform is at your own risk. Company makes no warranty that the use of the service and the platform will be continuous, uninterrupted, bug-free, error-free, virus-free, free of defects, free of technical problems, nor that it will meet all of your needs. To the extent permitted by applicable law, Company expressly disclaims all other warranties, conditions, results, guarantees, or representations with respect to the service and the platform, whether express or implied, including, but not limited to, the implied warranties of merchantability, merchantable or satisfactory quality, fitness for a particular purpose, non-infringement of third party rights, or arising from the course of performance, course of dealing, or usage of trade.
Investment in securities market are subject to market risks, read all the related documents carefully before investing. The valuation of securities may increase or decrease depending on the factors affecting the securities market.
EduFund and the EduFund App are the brand and product of Helena Edtech Private Limited
“An affiliate of the Company, i.e. Samyama Advisors Private Limited, is registered with the Securities and Exchange Board of India (SEBI) as an investment adviser under the SEBI (Investment Advisers) Regulations, 2013 bearing the registration number [INA000015321]. Samyama Advisors Private Limited may provide investment advice to the clients through the Company's platform.”
Registered Address: 30, Omkar House, Near Swastik Char Rasta, Navrangpura, Ahmedabad Gujarat, India – 380009
Transaction Platform Partner : BSE Star MF (with Member code-51573). CIN No: U67100GJ2020PTC112589. RIA Number: INA000015321 GST No: 24AAFCH2122L1ZU
Please scan QR code to download the EduFund app
Which Investment method to choose? Lumpsum vs SIP vs Step-up SIP
Which one should you consider while investing?
There are multiple ways to accumulate wealth through investing in a mutual fund. Here’s all you need about the Lumpsum vs SIP vs Step-up SIP, to make the right investing decisions discuss some conventional and modern methods of financing.
Lumpsum: One of the most popular and oldest ways of investing in mutual funds is making a lump sum investment. It is a one-time bulk investment in a mutual fund. The time of entering the market is crucial in lumpsum investment.
It can give you good returns when the market is in a bull run but may not provide returns in a bear run. No one knows exactly when a bull market is ending, and a bear market is starting. The investments’ entry and exit are crucial, depending on market conditions.
SIP: An SIP or a Systematic Investment Plan, involves a fixed amount going towards a mutual fund; on a daily, weekly, monthly, quarterly, half-yearly, or annually basis. A SIP is the most common way of investing in a mutual fund.
There are multiple benefits of investing through a SIP. The minimum amount required can be as low as ₹100/month, and rupee averaging cost and the power of compounding help to develop financial discipline. You don’t need to track the market daily.
Step-up SIP: Step-up SIP is the lesser-known way of investing in a mutual fund. With this way of investing, SIP can be increased on a half-yearly and yearly basis. As in percentage or numbers of the current SIP.
This option of funding can be chosen for multiple reasons like as you’re starting early in your career, have a low budget, cannot save much in the initial phase or want to check how SIP works.
Read:- NextGen investing made easy
Let’s understand all three ways with the help of an example.
Let’s say you want to save for your child’s higher education, who is just born. So, ideally, you have 16 years to invest until your child reaches that age; by then, the cost of graduation would be around ₹10,00,000.
You will make the investment in the BSE Sensex Index to take advantage of the growth of the entire index. Now, let’s understand which could be the ideal way to save for your child’s future as per your budget.
Note: Period understudy is between Jan’06 – Dec’21.
Source: EduFund Research Team
Note: Period understudy is between Jan’06 – Dec’21.
Source: EduFund Research Team
Note: Period understudy is between Jan’06 to Dec’21. The step-up amount is considered 10% annually.
Source: EduFund Research Team
Which is better?
In all the scenarios, an investor has made the wealth or the corpus needed for his child’s higher education. The amount invested is different for different modes of financing. You can figure out which could suit you the best from the above table.
Suppose you don’t have a sufficient bulk amount to achieve the target corpus. Then, you can consider investing through the SIP route, which requires a monthly SIP of ₹1,900 over the period. But even if you cannot afford to invest ₹1900/ month.
Then the last option that you can consider is Step-up SIP which requires less amount at the initial phase of the investment, but by the end of the journey, the amount of SIP can go up to ₹4,200/month. Choosing multiple options can help you to maximize your returns.
Income, investing objectives, financial stability, and risk are some factors to consider while choosing the option of investment.
Income, investing objectives, financial stability, and risk are some factors to consider while choosing the option of investment.
One should consider the risk involved when choosing any way of investing. Over time, wealth accumulates with the power of compounding acting upon the increasing investment base. It’s not a one or two-year play. The best way of investing in a mutual fund is SIP which will not hurt your pocket, minimize the risk, reduce the volatility, and create wealth.
Consult our expert advisor to get the right plan