Reliance Systematic Investment Plans (SIP) Product Overview

The basic aim of every investor is to receive reasonable gains without any risks. This is where Systematic Investment Plans (or SIPs) take the stage. The primary reason behind its popularity is that the investors have to shell out a small amount of money on a regular basis for this form of investment. Unlike the investment through other instruments, the investors don’t have to wait for the right time for investing the money, as this is a continuous process. As the funds are handled and examined by a professional fund manager, along with an analyst, the investors can be sure that their money is in secure hands.

Features of Reliance SIP

  • For investors with less capital or those who want to enter the investment world with minimum risks, Reliance SIP is a suitable option. This plan allows the individuals to invest as low as Rs. 100 on a monthly basis.
  • The flexibility associated with this plan, which allows the investors to decide the mode of payment, is another essential feature. By opting for the ‘Perpetual’ option related to this plan, the investors can get rid of hassles of renewing the plan regularly. Through this feature, the plan automatically gets renewed until the user instructs it to stop.
  • Reliance Insure is another vital feature linked to Reliance Systematic Investment Plan, which ensures that in an event of death of an investor, the insurance cover will pay the remaining SIP instalments. An investor should be 18-45 years of age to avail the facility.
  • The minimum monthly SIP amount to become eligible for this plan is Rs. 1000, whereas the minimum tenure for the plan is three years. In case the investor dies, the amount is added to the fund of a second holder or a nominee.
  • Another essential feature is free Life insurance cover up to 21 lakhs per investor across all schemes and plans at no additional cost

Types of SIP Plans

SIP Plans are mainly divided into two major categories, Equity Plan and Debt Plan.

Debt Plan

Reliance Debt Plans offer steady investments through SIP, which are also associated with minimum risks. In this option, sources of fixed income are included, some of which include corporate debentures, bonds and government securities. As the plan is associated with a long-term return of money, it remains shielded from market fluctuations. This ensures stability to the individuals associated with it.

Equity Plan

The individuals in pursuit of long-term appreciation opt for equity plans, as it allows the investors to choose the options as per their choice, like dividends or capital appreciation. There is a variety of plans linked equity SIP investments, including:

  • Diversified Large Cap: This is further divided into multiple forms, like actively managed funds. Investments, where the choice of investment depends on market capitalizations, are also part of it. In a specific option for NRIs, the emphasis is on stable companies, which also aims to contribute to the betterment of the Indian economy.
  • Diversified Small and Mid Cap: By making an investment through mid and small cap options for more than three years, the investor can expect a steady growth. It is also an ideal option for individuals who prefer high returns and are capable of handling high risks.
  • Diversified Multi Cap: These schemes are tailor-made for individuals looking for a diverse investment portfolio. It is the most flexible plan to make an investment on the basis of potential and opportunities of market cap.

Comparison with other popular plans

Only Reliance offers the facility to start an investment at as low as low Rs. 100 per month. With HDFC SIP, you need to invest a minimum of Rs. 500 per month, whereas for Birla Sun Life, it is Rs. 2000 per month. Just like Reliance, several other organizations are also offering insurance with SIP plans, like ICICI Prudential and Birla Sun Life’s MF Century SIP.

Benefits of Reliance SIP

The individuals can enjoy an array of benefits by selecting Reliance SIP options:

Disciplined savings: By indulging in this form of investment, the investors are able to make savings on a regular basis.

Flexibility: With numerous options and ability to decrease or increase the money being invested, the individuals enjoy the flexibility with these plans. These options also allow an investor to discontinue the plan at any instant of time.

Handling by financial experts: The team handling Reliance SIPs are experts in terms of financial market analysis, which ensures that chances of getting handsome returns are increased.

No impact of market instability: The fact that investment is spread over a period of time acts as a buffer against market instabilities. This feature, along with the uniformity linked to it, also ensures that average costs per units are quite low.

Financial security for the dependents: As Reliance Insure offers an insurance cover with its SIP investments, the individuals can be sure that their dependents can also enjoy the benefits of this scheme in case of a tragedy.

Conclusion:

All these benefits highlight the fact that Reliance SIP plans are safer options when compared to direct investments in mutual funds or stock markets. It is essential to analyze all the plans and the associated formalities and conditions before making the final decision. The investors must also be aware of the fact that these investments are not 100 percent free of risks. Therefore, the decision should be made on the basis of the ability to handle the risks, purpose of investment, term of investment goals , and  reading the fine print is essential too.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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