SIP - Systematic Investment Plan
SIP can be used in two ways:
Mutual Funds (MF)
- Switching not allowed without withdrawal
- Short-term & long-term capital gains tax applicable
- Liquidity is available (easy to withdraw)
- Low charges compared to ULIP
ULIP (Unit Linked Insurance Plan)
- Premium up to ₹2.5 lakh/year → Tax-free income (as per Sec 10(10D)
- Immediate fund switch option available
- Minimum lock-in period: 5 years
- Charges apply → FMC, Mortality, Allocation charges
Key Point
In both cases, SIP (monthly investment) is better than annual or lump-sum payment.
Strategy
- First invest via ULIP SIP up to ₹2.5 lakh premium limit (for tax-free income benefit).
- After that, invest in Mutual Fund SIPs (for diversification and liquidity).
- This way you balance tax efficiency + growth + liquidity.
SIP : ULIP & Mutual Fund Quote
Types of SIP
Regular SIP
- Fixed investment at regular intervals (monthly/quarterly).
- Builds financial discipline and long-term wealth.
- Ideal for beginners and salaried individuals.
Top-up SIP
- Allows you to increase your investment amount over time.
- Matches your rising income and lifestyle needs.
- Ensures higher wealth creation without financial stress.
Flexible SIP
- Choose how much to invest each month based on cash flow.
- Provides convenience for professionals with variable income.
- No fixed obligation—adaptable to your budget.
Perpetual SIP
- No fixed end-date, continues until you choose to stop.
- Keeps your money invested for as long as you want.
- Perfect for building a long-term wealth corpus.
Trigger SIP
- Invests based on predefined conditions like index level, NAV, or date.
- Great for experienced investors seeking strategic entries.
- Helps maximize opportunities with market-linked triggers.
Goal-based SIP
- Invest with a specific financial goal in mind (e.g., child’s education, home, retirement).
- Keeps your investments aligned with clear objectives.
- Ideal for focused wealth creation and achieving life milestones.
