Different Types of SIPs and How to Invest in SIPs

Systematic Investment Plans (SIPs) have become a popular way for individuals to invest in Mutual Funds. SIPs allow investors to invest fixed amounts regularly rather than in lumpsum, making it a disciplined approach to wealth creation. SIPs not only make investing more manageable but also help reduce market volatility through Rupee Cost Averaging. While many investors are familiar with the basic concept of SIPs, there are various types that cater to different investment needs and strategies. In this blog, we will explore the different types of SIPs and how they can benefit investors.

Types of SIPs

Given below are the various types of SIPs:

1. Regular or Fixed SIPs

In Regular SIPs, investors commit to investing predetermined, fixed amounts of money every month. This traditional form of SIP ensures disciplined investing and is suitable for those who prefer consistency and predictability in their investment amounts.

2. Top-up SIPs

Top-up or Step-up SIPs allow investors to add amounts to their investments periodically. This feature is beneficial for investors who expect their incomes to grow over time and want to capitalise on additional investment opportunities. By increasing the SIP amounts, investors can enhance their wealth accumulation potential.

3. Flexible SIPs

In Flexible SIPs, investors adjust their investment amounts based on the current value of their holdings. The goal is to achieve a target portfolio value, which means that investors will invest more when market values are low and invest less when they are high. This approach aims for consistent growth and better returns over time by taking advantage of market fluctuations.

4. Multiple SIPs

Multiple SIPs enable investors to diversify their portfolios by investing in more than one Mutual Fund scheme through a single SIP plan. This type of SIP is ideal for those looking to spread their investment risks across different funds, thereby enhancing portfolio stability and potential returns.

5. Perpetual SIPs

Perpetual SIPs do not have specified end dates, allowing investors to continue investing for as long as they wish to. This type of SIP is ideal for long-term investors looking to build wealth over an extended period without the need to renew or extend their investment plans.

6. Trigger SIPs

Trigger SIPs allow investors to set specific market conditions or trigger points that, once reached, will automatically initiate investments. This type of SIP is useful for those who want to take advantage of market movements and invest when certain predefined criteria are met.

How to invest in SIPs with ICICI Bank

You can invest in the type of SIP matching your investment plan online through ICICI Bank. Follow the steps given below:

1. To start your SIP investment process, download iMobile and log in to your account. Go to the ‘Invest & Insure’ section and select ‘Mutual Funds’. Easily complete your one-time KYC verification digitally.

2. Complete documentation with e-KYC on iMobile: KYC compliance is mandatory for investing in SIPs. As per the Securities and Exchange Board of India (SEBI) guidelines, you need to complete your one-time Mutual Fund KYC for seamless transactions across any platform. It is a zero data entry process and verification can be completed within 10 minutes through iMobile.

3. Create your risk profile: Create your risk profile under the ‘Mutual Funds’ section on iMobile. Answer a few questions to estimate your risk preference and investment goals.
4. Determine the investment amount: Decide on the amount that you wish to invest regularly. This amount will be auto-debited from your Bank Account on a recurring basis.

5. Pick the SIP Date: Choose a convenient date for the SIP amount to be auto-debited from your account each month. This date should align with your financial planning to ensure sufficient balance for the investment.

6. Submit Your Form: Complete the online registration by filling in all the required details and making the initial payment. This final step activates your SIP, setting you on the path to wealth accumulation.

Conclusion

SIPs offer a versatile and structured approach to investing in Mutual Funds, catering to diverse financial goals and risk levels.

Invest in SIPs through ICICI Bank conveniently and build disciplined investment habits, manage market volatility and work towards wealth creation.