What are the Benefits of SIP Top Up – What is in it for me?

Investing in mutual funds allows you to invest bit-by-bit for your financial goals. You can do this through regular SIP (Systematic Investment Plan) investments in mutual funds. Now, SIP allows you to be flexible and regular at the same time with your investments.

When you choose the SIP route to invest, you are free to invest at a fixed frequency. This can be weekly, monthly, quarterly and more. But what if your capacity to invest increases?

SIP Top-ups allow you to increase your specified investment amount periodically. You can specify this amount as a fixed amount or percentage annually, over and above your regular SIP. You might be thinking that you can even make a lump sum to divert extra cash into your investment, right. Then, how is an SIP Top-up better? 

Here are a few advantages of going for an SIP top-up

• Investment-Income Match

For most of us, our salaries are revised, bonuses or variables are disbursed, and appraisals are considered annually. An SIP Top-up helps your investments to adapt to your income automatically.

• Inflation-beating Add-on to your Investments

We all know the way inflation erodes our savings. If you still have doubts, you can think about your childhood and the things you could purchase with ₹100 versus now. Inflation can push you away from your goals if you do not plan well.

An SIP top-up can help your investments get an inflation-beating add-on. This can help you increase your SIP instalments towards your goal as you stay in line with inflation.

•  Convenient to Keep Track

As you choose the top-up option while enrolling for the SIP, it starts working on an autopilot mode during the specified time frame. Therefore, you can be relieved from the hassles of changing your SIP amount every year in the same folio.

•  Faster Way to Reach Goals

For each financial goal, you might have a projected timeline. But can you reach these goals sooner? Yes, that’s possible since your increments in income now match with your investments. Therefore, you have a chance to grasp the opportunity beyond your reach with the top-up SIP option.

To sum up this article, top-up SIP can help your investments match your income, beat inflation and reach your goals sooner with lesser operational hassles. Thus, it helps you stay flexible and regular with your investments at the same time.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully

Article Shared by Tata AMC