What are the types of SIPs available in India?

There are ways to invest in mutual funds. You can choose the lump sum mode, where you contribute a significant sum altogether in a mutual fund of your choice. If you do not want to invest via the lump sum mode, you can contribute systematically to your mutual fund scheme through the SIP (Systematic Investment Planning) mode. In the SIP mode, you pay a fixed sum at defined intervals for a fixed duration. SIP and long-term investing is the ideal method to accumulate wealth through mutual funds. SIPs further help in rupee cost averaging as you invest across different market cycles. However, to ensure you get all benefits of SIP investment, you should understand the different types of SIPs available in India.


Here are some of the most popular types of SIPs available in India:

  • Flexible SIP: Also known as Flexi SIP or Flex SIP, flexible SIP gives you the advantage of changing your contribution amount for your mutual fund scheme. You have to inform the fund house about the changes in the SIP amount at least a week in advance from the date of the SIP deduction. This type of SIP investment in mutual funds is beneficial since you can accommodate your investments per your financial or market conditions. For instance, if you receive a bonus, you can increase your SIP amount for the month, and in the next month, if you face a cash crunch, you can reduce your SIP accordingly. 
  • Perpetual SIP: A perpetual SIP is a type of SIP with no maturity tenure. When you invest in mutual funds, you have to specify the tenure of the SIP. If you do not mention the term and leave the space in the form blank, the fund house continues your SIP until you provide them instructions to stop it. Perpetual SIP is best suited for people who want to stay invested long-term and observe the market. You can redeem your mutual fund scheme whenever you want.
  • Trigger SIP: Trigger SIPs allow you to specify a condition for your mutual fund investment. For instance, you can place a trigger that the SIP amount should be deducted from your bank account for a particular mutual fund scheme only if the NAV (Net Asset Value) falls to a certain level. You can place triggers for dates and even for levels of popular market indices like Nifty or Sensex. This type of mutual fund SIP is beneficial if you are a seasoned investor with an in-depth market understanding.
  • Top-up SIP: Also known as Step-up SIP, this SIP allows you to increase your mutual fund contributions periodically. By increasing your mutual fund investment amount at regular intervals, you potentially improve your chances of creating a significantly large corpus for your financial goals. For instance, if you have a SIP of Rs. 6,000 every month, you can instruct your fund house to top-up your contributions by Rs. 1,000 after every six months. Top-up mutual fund SIPs allow you to utilize the benefit of compounding more wisely. 

These are four of the most popular types of mutual fund SIP investments. However, there are several other types of SIPs offered by different mutual fund houses. You can check different mutual fund schemes on the Tata Capital Moneyfy app and find the SIPs that best align with your needs and financial goals. The Moneyfy app also allows you to invest, monitor, and manage all your SIPs from one platform.

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