Our goal at Borrow Loan Company is to provide access to personal loans and education loan, car loan, home loan at insight competitive interest rates lorem ipsums. We are the loan provider, you can use our loan product.
Systematic Investment Plans (SIPs) have become a popular way to invest in mutual funds. Many investors are familiar with the regular monthly SIP, where a fixed amount is invested monthly. However, did you know that five other types of SIPs can enhance your returns and offer greater flexibility? Let’s explore these six types of SIPs to help you make smarter investment decisions.
The regular SIP is the most commonly used type of SIP. In this method, a fixed amount is deducted from your bank account and invested in a mutual fund at regular intervals—monthly, bi-monthly, quarterly, or even half-yearly.
Key Features of Regular SIP:
This is the simplest and most straightforward way to invest in mutual funds, making it a popular choice for beginners.
As the name suggests, perpetual SIPs have no fixed tenure. You can continue investing as long as you want and stop whenever it suits you.
Advantages of Perpetual SIP:
Most mutual funds allow you to continue SIPs for up to 40 years, ensuring you can build wealth over a long time frame.
Flexible SIPs allow you to change the investment amount depending on the market conditions or your financial situation.
How Flexible SIP Works:
This option is perfect for investors who actively track market trends and want to maximize their returns.
Trigger SIPs are designed for investors with a good understanding of the stock market. These SIPs start investing automatically based on predefined market conditions, such as a specific drop in market indices.
Examples of Trigger SIPs:
While this type of SIP can help you take advantage of market opportunities, it requires knowledge and close monitoring of market trends.
A top-up SIP allows you to increase your investment amount periodically, usually aligned with your financial growth.
Why Choose Top-Up SIPs?
For example, if you start a SIP with ₹5,000 per month and get a 10% salary hike, you can increase your SIP by ₹500 to ₹5,500 monthly.
This unique type of SIP offers term insurance coverage along with your mutual fund investments.
Features of Insurance SIP:
This is an excellent choice for those looking to combine investments with life insurance benefits.
Understanding these different types of SIPs can help you align your investments with your financial goals. While regular SIPs are great for disciplined investing, flexible or trigger SIPs might suit those who want to time the market. Top-up SIPs and insurance SIPs offer added benefits for those with increasing income or looking for a combination of investment and protection.
Many investors unknowingly stick to just one type of SIP—monthly regular SIP. While this is a good starting point, exploring other SIP types can unlock better returns and flexibility. For example, perpetual SIPs are ideal for long-term goals like retirement, while top-up SIPs let you take advantage of growing income.
By choosing the right SIP type, you can: