What is Top-up SIP? Learn benefits of choosing this option in Mutual Funds

For individuals with long-term goals, a Systematic Investment Plan (SIP) in mutual funds is one of the most efficient ways to build capital. Investors can easily contribute a predetermined amount at a fixed frequency to mutual funds and take advantage of the highs and lows of the market through Rupee cost averaging of acquisition costs or NAV.Experts will occasionally advise investors to expand their SIP contributions to the mutual funds they have already invested in when they have extra money to spare.Investors can raise their annual SIP investment through SIP top-ups. With this feature, the investor has greater freedom to make larger investments over the course of the SIP. These facilities are popularly referred to as SIP Booster and SIP step-up facilities.During the course of an ordinary SIP, individuals are not permitted to increase their contribution. They must choose a new strategy if they want to invest more money. On the other hand, customers who use top-up SIPs or SIP boosters can regulate their SIP contributions and raise them in line with their anticipated income growth.Benefits of opting for top-up SIP or SIP booster:By using SIP top-ups, one can begin investing more money at once and reach the desired target amount earlier than anticipated.Investors may combat rising inflation by using the top-up SIP option. The value of money continues to decline as a result of growing inflation. By increasing the SIP payments by the rate of inflation or more, they can make the most of this situation.Top-up SIP operates automatically, preventing investors from having to register new SIP accounts each time they want to boost their SIP contribution. A top-up scheme enables customers to increase their SIP amount in the same plan if it is earning respectable returns, thus improving their profit.Investors can enhance their monthly SIP contributions by picking a top-up mutual fund alternative. For instance, an investor may decide to invest more if they have previously made Rs 10,000 in an equity plan. He can choose SIP top-up in order to add his preferred amount at the end of each calendar year, financial year, or every six months.Read all the Latest News, Trending News, Cricket News, Bollywood News, India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

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Published on : 2022-12-01 09:28:34

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