What Are the Different Types of SIPs?
SIP. This article explains seven different types of SIP. With SIPs, investors can adopt a disciplined approach to investing with just a one-time mandate.
SIPs allow one to make investments every month or quarter. By investing in SIPs, investors may be able to generate significant returns over time. However, the key to a successful SIP is choosing the right one.
The following are the seven types of SIP investments available in India: Regular SIPs are the most straightforward investment plans. Under this plan, the investor invests a fixed amount at regular intervals. There are various frequencies for SIPs, including monthly, bi-monthly, quarterly, and half-yearly.
You can also set up SIPs on a daily and weekly basis. When choosing a SIP, investors can specify the duration, installment amount, and frequency. However, when investing in a regular SIP, one cannot change the investment amount during the investment period.
Top-up SIPs or Step-up SIPs allow investors to increase their SIP amount periodically. Many asset management companies offer stepped-up SIPs. This type of SIP provides more flexibility and enables investors to park large amounts.
When an investor's income increases, they can increase their SIP contributions simultaneously. Through compounding, they may be able to build an investment corpus more quickly. Flexible SIPs offer their investors the flexibility to adjust their investment amounts.
It is also known as Flex SIP or Flexi SIP. You can notify the fund house if you want to modify the SIP amount or contributions. However, the intimation should be given at least a week before the installment deduction date.
Read more on livemint.com
