Investing in mutual funds: A systematic investment plan SIP in mutual funds is a good way to create wealth for investors who have long-term goals. SIP is an easy way to contribute a fixed amount at a fixed frequency in mutual funds, where investors can make the best of the market's highs and lows through the averaging of acquisition costs known as NAV.
When investors have surplus money to invest, experts ask them to increase the SIP amount in mutual funds they are already investing in. There is a SIP Top-up that allows investors to increase the SIP amount they are investing annually. Such a facility allows the investor to invest higher amounts during the tenure of the SIP. SIP Booster or SIP step-up facilities are also known as these facilities.
Under normal SIP, investors can't increase their contribution during their SIP tenure. They have to opt for a new scheme for more investment. The SIP boosters or top-up SIPs allow customers to automate their SIP contribution and increase it in line with their expected growth of income.
By opting for a top-up mutual fund, investors can increase their monthly contributions in an ongoing SIP. If an investor already invests 10,000 in an equity MP scheme, he's going to invest more. He can add a desired amount at the end of a fiscal year or a financial year, or every six months and add his desired amount at the end of each fiscal year.
With this facility you can start investing more at a time and can accumulate the goal target amount sooner than the expected time frame.
SIP is a top-up facility that helps you fight rising inflation. A smart way to get the most out of this situation is by raising the SIP contributions equivalent to the inflation rate or more.
The auto pilot mode of top-up SIP saves the investors from having to open new SIP accounts every time they want to increase their SIP contribution. If your scheme is giving handsome returns, a top-up SIP helps you increase the SIP amount in the same scheme, giving you more profit.