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Types of SIP

Understanding the different types of SIP will help you choose the right scheme as per your goals.
Here are the types of Systematic Investment Plans available-

Top-up SIP
The Top-up SIP allows you to increase your investment amount periodically giving you the flexibility to invest higher when you have a higher income or available amount to be invested.
This also helps in making the most out of the investments by investing in the best and high-performing funds at regular intervals.

Flexible SIP
As the name suggests, a Flexible SIP plan carries flexibility in the amount you want to invest. An investor can increase or decrease the amount to be invested as per his own cash flow needs or preferences.

Perpetual SIP 
A perpetual SIP Plan allows you to carry on the investments without an end to the mandate date.

Generally, a SIP carries an end date after 1 Year, 3 Years, or 5 years of investment. The investor can hence withdraw the amount invested whenever he wishes or as per his financial goals.

Benefits of Investing in SIP
There are several benefits of investing in SIP over Lumpsum. Some of them are listed below

Makes You a Disciplined Investor
SIP can be the best investment option for you if you do not possess superior financial knowledge about the way the market moves.

You do not have to spend your time analyzing the market movements or the right time to invest.

With SIP since the money gets auto-deducted from your account and goes to your mutual funds, you can sit back and relax. Further, unlike lump sum investments, it ensures that you are working actively towards making your investments grow because of the periodicity.

Rupee Cost Averaging Factor
With SIP comes the advantage of rupee cost averaging.

With SIP since your investment amount is constant, for a longer period, with rupee cost averaging you can take advantage of market volatility. The fixed amount you invest using an SIP averages out the value of each unit.

So you can buy more units when the market is low and buy fewer units when the market is high, lowering your average cost per unit.

Power Of Compounding
SIP is a disciplined way of investing and ensures you constantly strive to make your investments grow.

The automation makes sure your investment grows as opposed to a lump sum where you may forget to invest some time. The small amount you invest daily grows up to a large corpus due as a sum of your contribution and the returns compounded over the years.