New Delhi: In the past few years, Indians have embraced the SIP investment model in mutual funds. SIP is the euphemism for Systematic Investment Plan and is seen as a simple and very structured way of investing in MFs. Many people think of SIP as a monthly type of investment only, yet there are various types of SIP loans that can be used for different types of financial investments and objectives.

According to numbers published by Association of Mutual Funds of India (Amfi), the inflow in equity schemes of the mutual funds surged by 14 percent to Rs 41.156 billion in December 2024. With investors being optimistic on the small and midcap schemes of mutual funds, the inflow into SIP schemes registered an increase of Rs 26459 crore from Rs 25320 crore in November. The body that regulates MF industry says that assets under management reached Rs 136.3 trillion.

Types of SIP

Regular SIP

When funds are added every month, quarter, or even bi-annually, it is in the form of a Regular SIP, which is currently the most popular form of SIP. You can classify this way of operating an investment plan as highly automated, regular, and disciplined because the monthly amount is directly taken from your bank account on a particular date. If an amount is invested for a sufficiently long period of time, then this would also yield substantial returns through the compounding effect.

Top-up SIP

In this type of Mutual Fund investment, the investors tend to increase the SIP amount as their income increases. As an example, consider a case where salaries hike occurs; then the investors may also up their contribution towards the SIPs. This option is suited to those investors who demand more returns after a long time.

Trigger SIP

This SIP investment type drags external influences that relate to movers of the market. Quite a number of investors do set triggers, for instance, some will set the trigger that states that when the share market goes down by 5 percent, they would invest in Mutual Fund schemes. Considering the risks involved it is assumed that the investors show some level of expertise.

SIP Flexibles

Among investors who are able to adjust the amount they invest in accordance with the stock market conditions and fluctuations, Flexi SIP schemes are particularly suited. In this method of investment, investors invest less money in SIPs when the markets are high and cam invest more money when the market is low and in demand. This is ideal for investors who are very active on the market.

SIP Insurance

It offers insurance policies to the investors and uses the amount for purchasing mutual funds with them. In it investors get insurance cover which is a term insurance policy 10 times higher than the first amount of SIP. It is an investment that comes with a commitment. The fund houses provide life insurance coverage under Group Term Insurance to individual investors who make SIPs of a particular scheme.

SIPs Indefinite

As regards SIPs Indefinite, the investors have no minimum or maximum duration for investment. These SIPs are open-ended meaning they have no early closing dates and members may request a continous or regular investment for the rest of their lives or until they reach their investment goals. There is no concept of renewal and one may invest as long as they want.