![]() Systematic investment plans or SIPs mean that you are investing a fixed sum at regular intervals, usually, monthly. How does Systematic Investment Plan (SIP) Work? This trigger automatically redeems itself, allowing you to swap between schemes whenever the market becomes volatile. Preferred by experienced investors, this SIP plan lets you set a trigger. Thus, it gives you the full right to stop the SIP investment anytime you want. 3) Perpetual SIPĪ perpetual SIP doesn't have a fixed end date of the plan. In this way, you can increase or decrease the current fixed amount even before seven days of the next installment. 2) Flexible SIPĪ flexible SIP plan lets you control the investment amount according to your cash flow. ![]() For example, if you are currently investing ₹1000 each month, you can choose an increment of ₹500 after every six months making it ₹1500 after 6 months, ₹2000 in another 6 months, and so on. Types of SIP (Systematic Investment Plan)Ĭurrently, most Indian banks and mutual fund providers offer four main types of SIP plans as described below: 1) Top-Up SIPĪs the name suggests, Top-Up SIPs let you increase your SIP investment amount after a certain period. ![]() Once the investor validates a SIP, a fixed amount of money is regularly deducted from their linked bank account.Īfter started investing in SIP, the investor does not have to worry about the market dynamics and gets the benefit of staying invested for long-term due to the power of compounding and average costing. Unlike other investments, you don’t have to deposit a lump sum amount. As SIP plans are pretty flexible in terms of amount and intervals, you don’t need to have a large sum of money to start with. The intervals at which the amount is deducted can be weekly, monthly, quarterly, half-yearly, or yearly based on their chosen plan. Under the SIP plan, one can invest an amount as low as ₹500. The SIP intervals at which the fixed amount is invested can be weekly, monthly, quarterly, half-yearly, or yearly based on their chosen plan. The fixed amount of instalment money can be as low as Rs. ![]() SIP allows an investor to invest a fixed amount of money in his preferred mutual fund scheme at pre-defined intervals. What is SIP - Systematic Investment Plan?Ī Systematic Investment Plan (SIP), more commonly known as SIP, is an investment route provided by mutual funds to the investors to invest in a disciplined manner. Let us understand in detail about what is SIP and how it works. As the name suggests, SIP is a planned investment toward your desired mutual fund for prolonged benefits. By taking the SIP route to assets, the investor puts in a time-bound manner without worrying about the market dynamics and stands to benefit in the long-term due to average costing and power of compounding.Ī systematic investment plan is a financial investment you can choose to make the best of a mutual fund. It can be made in the frequency of weekly, monthly, or quarterly. The investor can make the investment in small amounts instead of lump-sum. SIP is an investment facility where the investor can make a systematic periodic investment in market-linked funds for a specific tenure. A systematic Investment Plan (SIP) is an investment strategy offered by mutual funds.
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