Choosing the Right Type of SIP

Jan-17-2023Blog by – Mr. Dhruv AjmeraRead Time: 4 Min.Word Count: 523
3Choosing the Right Type of SIP

Systematic Investment Plan (SIP) has gained immense popularity over the last decade. There are currently around 6.05 crore SIP accounts in India!


SIP is one of the best options for people who want to invest in mutual funds online in small amounts at regular intervals instead of lump sum amount at once. SIPs leverage rupee cost averaging and compounding principles to lower the market risk and generate good returns in long term.


There are different types of SIP options that you can consider:

1. Regular SIP

This is the most basic and simplest of SIP. You can invest a predetermined amount in SIP every month, quarter, or six months. There are even daily, weekly and bi-monthly SIPs. The SIP amount remains fixed and equal. You just need to give a standing instruction to your bank to debit this amount from your savings account and credit it to the mutual fund house.

If you are investing in SIP for the first time, it is advisable to use the SIP goal calculator. It will give you an idea about how much you need to invest to earn returns as per your financial goal.


2. Flexible SIP

Regular SIP doesn’t allow you to change the amount unless you discontinue it and start a new one. However, flexible SIP allows you to increase or decrease the amount as per the market conditions or your investment goals.

It is important to inform the mutual fund house about the change at least a week before the deduction date.


3. Top-Up/Step-Up SIP

This type of SIP enables you to increase the SIP amount regularly. For example, you can start a monthly SIP of Rs2000 and then instruct the mutual fund house to increase it by Rs500 every six months.

This is a good option for investors who expect their income to increase through salary hikes, bonuses, or other sources of cash flow. You can also consult your mutual funds investment advisor to determine the top-up amount.


4. Perpetual SIP

Usually, most SIPs have a fixed tenure – there is a maturity date. However, there is no such end date in a perpetual SIP. You can remain invested as long as you want.

The perpetual SIP will discontinue only after you submit a request to stop it.


5. Trigger SIP

Trigger SIP allows you to modify your SIP as and when market conditions get favourable or volatile. You can trigger the SIP investment by starting a new SIP, redeeming existing units, or switching to another plan.

Trigger SIP is recommended only for experienced investors who have an in-depth understanding of market dynamics. These investors rely heavily on the SIP return calculator to take premeditated risks.


If you are looking for professional advice on SIP investment, Ajmera x-change can help you. We are a SEBI-registered company in India offering a diverse portfolio of financial services and products, including mutual funds. Our easy-to-use online SIP investment calculator is a powerful tool to figure out the amount of investment and expected returns. Our in-house mutual fund advisors have expertise in analysing different SIP schemes and choosing the right one for you.


Get in touch to know more.

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