New Delhi: Mutual Fund SIP investments have become very popular in India in the recent years. The Systematic Investment Plan (SIP) is considered to an easy and disciplined way of investing in MFs. Several people think that SIP is limited to monthly investments only, but there are many types of SIPs, suitable to meet different financial needs and goals.
As per the data released by Association of Mutual Funds of India (Amfi), mutual funds’ equity schemes inflow recorded a surge of 14 per cent on-month to Rs 41,156 crore in December 2024. With investors maintaining their faith in the small and midcap schemes of mutual funds, the inflows into SIP plans came at Rs 26,459 crore, up from November’s Rs 25,320 crore. The MF industry body SIP mentioned that assets under management stood at Rs 13.63 lakh crore.
Types of SIP
Regular SIP
Regular SIP is the most common type of SIP in which investors invest a fixed amount on every month, quarter or half-yearly basis. It is considered to be a regular and disciplined method of investment, where the amount is automatically deducted from the bank account on a fixed date. This investment can fetch you huge monetary benefits of compounding when invested over a long period.
Top-up SIP
In this type of Mutual Fund investment, the investors tend to increase the SIP amount as their income increases. For example, if salaries increase, investors may increase their investments in the SIPs. This option is beneficial for those who want higher returns in the long run.
Trigger SIP
This SIP investment type is related to market activities. Several investors set triggers, i.e. when the stock market declines 5 per cent, they pour in money in Mutual Fund schemes. However, the investors should have a deep understanding of the market to opt for this option. It is suitable for experienced investors.
Flexi SIP
Flexi SIP schemes are apt for those investors who can change their investment amount according to the stock market condition. In this type of investment, investors pump in less money in SIPs when the market is on a high, and pur in huge money when the market is in positive territory. This option is suitable for investors who keep a close tab on market fluctuations.
Insurance SIP
This SIP investment provides insurance cover to investors along with investments in the mutual fund schemes. In this, investors get term insurance, which can be up to 10 times the first amount of SIP. It provides financial security along with investment. The fund houses provide life insurance cover under Group Term Insurance to individual investors undertaking SIP in specific schemes.
Perpetual SIP
The investors opting for Perpetual SIP don’t have any fixed time period for investment. These SIPs don’t have a termination date and the investors may continue investing till they are able to achieve their financial goals. These don’t have the concept of renewal and one may continue investing as long as they want to.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO and Mutual Funds.)
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