Current time everyone to secure their future. Meanwhile, to secure the future, people have done so many things. Someone invests in something or somebody makes a FD, savings account, whatever. Right now, investment in mutual funds through a systematic investment plan or SIP.
SIP investment
SIP in India is increasing steadily. As of October 2024, the number of SIP portfolios in the country exceeded 100 million. But not all SIPs are the same. These are mainly of 5 types. Knowing about these, you can guess which SIP is right for you according to age and needs.
1. Regular SIP
Through this, you can invest in any scheme of mutual funds every month, every two months, quarterly, half-yearly, or annually. You can also start this SIP online. After this, the fixed amount is debited from the investor’s account on the due date and is automatically invested in the prescribed mutual fund scheme. Investors can choose the interval, duration, amount, and frequency of investment at the very beginning. Once selected, you cannot change it again and again.
2. Flexible SIP
In this, the investor has the freedom to change the SIP amount. That is, if the financial condition of the investor is good in a month, then he can increase the SIP amount, and if there is any financial difficulty, then he can also reduce the amount.
Which is better for
This is for investors whose income and expenses are uncertain or who can have large sums of money coming in at any time. This method is also better for freelancers, business owners, or the self-employed, as well as investors who want to take advantage of market fluctuations.
3. Step-up SIP
The investment amount is increased regularly. Compounding benefits more as the investment amount increases. This helps in raising a larger amount of money in the long run. Inflation can also deal with the fall in the value of the rupee.
For those who are better
For employees who get a salary increment every year or at regular intervals. Businessmen whose profits increase every year or investors who want to do financial planning for buying a house, children’s education, retirement, etc.
Who’s better? It’s ideal for investors with stable incomes who want to raise large funds and provide family insurance coverage. It is also better for those who are starting to invest in mutual funds or who do not have separate insurance and want financial security at the initial level.
5. Trigger SIP
Under this, the investor invests in SIP on the basis of a certain bet or trigger. A fixed amount is invested in it at regular intervals every month. But this amount is invested or triggered only when a particular situation or level is formed in the market. Triggers can be of many types, such as…
Index Level Trigger
Fixed debt trigger
Under this, investment in mutual funds is done by setting a specific date or time frame.
Return Base Trigger
If the value of a fund increases or decreases by a certain percentage, then it is invested.
Profit booking trigger
If the returns of a fund reach a certain level, profits can be booked or reinvested.
Who is better for
investors who are adept at predicting market direction and trends. Those who have a high-risk appetite can also try it.
