• SIP-top up facility: You can start investing in mutual funds through SIP with an amount as low as ₹500, and gradually increase it through SIP top-up
SIP-Top up facility: Investing through Systematic Investment Plan (SIP) is considered to be one of the best ways to generate wealth keeping in mind the long-term horizon. Many retail investors use SIPs to achieve long-term financial objectives such as home ownership, children's education, marriage or retirement. You can start investing in mutual funds through SIP with an amount as low as ₹500, and gradually increase it through SIP top-up.
What is SIP-Top up?
A SIP top-up facility allows an investor to increase his SIP amount annually. This facility provides the investor with the option to increase the amount of his SIP installment by a specified amount or percentage at fixed intervals.
SAG Infotech Managing Director Amit Gupta said that an investor can increase his monthly payment for an ongoing SIP by using the top-up service.
SIP-Top Up is also known as SIP Booster or SIP Step-up option
"Some fund companies refer to this as top-up, while others refer to it as SIP booster or SIP step-up option. Most of the renowned investment companies provide this service to investors," said Amit Gupta ,
Difference Between Normal SIP and SIP-Top Up
Manoj Kumar Dalmia, Founder and Director, Proficient Equity Pvt Ltd said that in case of normal SIP investors are not given the option to increase their contribution. If they want to increase it, they will have to start a new SIP or make a lump sum contribution.
He added that investors have the option to automate SIP contributions and increase them thanks to top-up SIPs as per their projected growth in income.
Why do financial experts recommend SIP-top up facility?
According to Amit Gupta, financial experts recommend investors to use the top-up feature as it automatically compensates for inflation and handles revenue growth such as annual increments. Most of the salaried employees receive annual increments, thus they recommend that investors refill their SIPs on an annual basis. This is taken care of through the top-up facility.
“By guaranteeing that investors are saving alongside their income, a top-up SIP ensures that they can keep up with the monthly increase in income. This helps them beat inflation and reach their financial goals faster. helps contributors to achieve," said Manoj Kumar Dalmiya.
How does this work?
For example, if you invest Rs 10,000 per month in SIP and want to add Rs 1,000 per month, you can use the top-up facility at the end of every financial/calendar year or financial year, or every six months. Can
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