What is Top Up SIP? How does it work? Know everything here about this formula that made investors rich

Photo:India TV What is Top Up SIP? Makes the investor rich

Mutual Funds Investing: A Systematic Investment Plan (SIP) in Mutual Funds is one of the effective ways to create wealth for investors with long-term goals. SIP Mutual Fund is also an easy way to contribute a fixed amount over a specified limit. Let us know what is TOP Up SIP, which all successful investors know and take advantage of.

This is how you get the opportunity of TOP Up SIP

Sometimes when investors have extra money to invest, experts ask them to increase the SIP amount in mutual funds in which they are already investing. Here comes a SIP top-up, which allows investors to increase the SIP amount that they are investing annually. Such a facility increases the flexibility of the investor to invest higher amounts during the tenure of the SIP. These facilities are also known as SIP Booster or SIP Step-up facilities.

Under a normal SIP, investors cannot increase their contribution during their SIP tenure. For higher investments, they have to opt for a new scheme, while Top-up SIP or SIP Booster allow customers to automate their SIP contribution and increase it in line with their expected growth in income.

How does this work?

Investors can increase their monthly contribution in an ongoing SIP by opting for the top-up facility of the mutual fund. For example, if an investor is already investing Rs 10,000 in Equity MP Scheme, wants to invest more. He can opt for SIP Top-up and add any amount he wants at the end of every financial/calendar year or financial year or every six months.

Benefits of doing Top-up SIP

  1. Helps you reach your financial goals faster. With this facility one can start investing more in one go and deposit the target amount before the expected deadline.
  2. Top-up SIP facility also helps you fight rising inflation. With rising inflation, the value of money goes down. A smart way to make the most out of this situation is to increase SIP contribution equal to the inflation rate or more.
  3. Top-up SIP works in an auto pilot mode, which means it saves investors the hassle of opening new SIP accounts every time they want to increase their SIP contribution. If your scheme is giving good returns, then a top-up SIP helps you to increase the SIP amount in the same scheme, thereby giving you higher returns.

Latest Business News

Get the more latest news about Business