SIP, i.e. Systematic Investment Plan, through which the trend of investing has increased rapidly in the last few years. Perhaps you too must be investing in SIP. But do you know how many types of SIPs are there?
If you do not know, then know today because before investing in Mutual Fund, it is very important to know how many types of SIPs are there and in which category it will be right for you to invest. It is not wise to invest in any SIP (Systematic Investment Plan) without understanding. Therefore, today we will tell you about 5 different SIPs.
1. Regular SIP
Most people know about Regular SIP. Regular SIP is a method of investment in which you invest a fixed amount every month. You can choose to invest this amount every month, two months, three months or half yearly as per your convenience. Regular SIP is very popular because the amount, date and period of investment are already fixed in it. You have the option to choose the date on which the SIP money will be sent. Investors also have the option of Daily SIP and Weekly SIP.
2. Step-up SIP
In Step-up SIP, investors get the facility to increase their SIP investment after a fixed time. For example, if you want, you can increase your SIP amount on an annual basis. Suppose you do a SIP of Rs 5,000 every month, then under this SIP you can increase your investment amount by 5% or 10% annually, whichever you want. In this way, your investment keeps increasing automatically year after year.
3. Flexible SIP
Flexible SIP, as the name suggests, is very convenient. Because in this you can increase or decrease the amount of SIP according to your budget and requirement. For example, if your expenses increase a lot in a month due to an emergency, then you can reduce the amount of your SIP. But let us tell you that if you want to increase or decrease your SIP amount in a month, then you will have to inform your fund house one week before the date of SIP deduction.
4. Trigger SIP
Now coming to Trigger SIP, this SIP is a good option for those investors who believe in investing at the right time. In this SIP, you can decide on the basis of money, time and valuation when the SIP will be triggered. That is, you can set some conditions in advance, such as time, market valuation, price etc. For example, if you decide on the basis of price, you can set a condition that the SIP should be triggered when the NAV exceeds Rs 1000. When the condition you set is met, your investment is triggered. This SIP is especially for those investors who want to take advantage of the market fluctuations. You can also plan a triggered SIP based on time and valuation.
5- SIP with Insurance
In this SIP, you get insurance protection along with investment, i.e. you also get term insurance cover. Under this SIP, many fund houses provide insurance cover to the investor up to 10 times the amount of the first SIP. The insurance cover increases later. This gives the investor the benefit of additional protection. But keep in mind that this feature is available only in equity mutual funds.
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