Nowadays when you ask for a suggestion about where to invest your extra money most of them suggest Mutual Funds. An investment in mutual funds is the newest and safest trend in the market. And SIP a Systematic Investment Plan is the most convenient way of investing in mutual funds.
SIP is a systematic and planned approach wherein the investor invests a fixed amount of money at a regular interval which may be weekly, monthly, quarterly etc. It is a safe investment which helps to build wealth for the future. And also inculcates the habit of disciplined savings.
The four different types of SIP are as follows:
1. Top Up SIP-
This type allows you to increase your investment amount periodically. As when your income increases you can opt to increase your investment amount.
2. Flexible SIP-
This type goes hand in hand with your cash status; enabling you to increase or decrease the amount of investment depending upon the cash you have at that given time.
3. Perpetual SIP-
When your SIP does not have an end date it is referred to as the Perpetual SIP. It allows you to redeem your funds as per your requirements.
4. Trigger SIP-
If you have limited market knowledge you can opt for this type. However, it involves speculation, so this type is not much recommended.
It can be said that SIP is undoubtedly the best way of investment, especially for beginners.
To get more detail on what are the various SIP plans and schemes? Kindly refer https://www.investopedia.com/terms/m/mutualfund.asp