SIPs: Here Is The Best One To Choose The Best One for Financial Goals

Outlook Money

What is a SIP?

A Systematic Investment Plan (SIP) lets one invest in mutual funds by contributing a fixed amount regularly, usually every month or quarter. This approach encourages disciplined investing and makes it easier for people to start with a smaller amount, eliminating the need for a large initial investment.

Main types of SIPs to consider

1. Regular SIP- In a Regular SIP, one can invest a specific amount at regular periods, such as monthly, quarterly, or semi-annually. One also has control over both the investment amount and the start and end dates.

Regular SIP

2. Top-Up SIP

Top-Up SIPs give the option to gradually increase investment amounts at regular intervals, either by a fixed amount or a percentage. This feature helps to adjust investments as income grows or when one has extra funds available.

3. Flexible SIP

With flexible SIPs, one can adjust the investment amount according to financial circumstances. This adaptability ensures that investments can be modified according to changes in financial circumstances, whether there is a need to pause, decrease, or increase contributions.

4. Trigger SIP

Trigger SIPs enable one to automate investments by setting them according to specific market conditions or predefined criteria, such as a particular market index level or NAV value. The goal of this type of SIP is to optimize investments in reaction to market changes.

5. Perpetual SIP

Perpetual SIPs do not have a set end date, allowing them to invest indefinitely and stop at discretion. When initiating this SIP, one leaves the end date unspecified and can end it whenever necessary.

Choosing the Right SIP

It is crucial to choose the appropriate kind of SIP to match the investment approach to the investment horizon, risk tolerance and financial objectives. Choosing the right SIP plan makes one stay focused on achieving long-term financial goals.

Read more

Read More