SIP TOP-UP: SIP can be done every month, week or daily. In long term SIP, investors get the benefit of compounding. One facility in this is Top-Up SIP. That is, if you add a fixed amount every year along with monthly SIP, your corpus can be doubled.
SIP TOP-UP: There is a huge craze for SIP in mutual funds. SIP investment reached a record level of Rs 16,928 crore in October 2023. SIP investment stood at Rs 16 thousand crore for the second consecutive month. Systematic Investment Plan (SIP) investment in mutual funds promotes long term investment. SIP can be done every month, week or daily. In long term SIP, investors get the benefit of compounding. One facility in this is Top-Up SIP. That is, if you add a fixed amount every year along with monthly SIP, your corpus can be doubled.
TOP-UP SIP can be understood as if you have chosen the option of monthly SIP of Rs 10,000. By the way, as your salary is increasing every year, you can top-up some amount in SIP every year in that proportion. Let us understand this through calculations.
SIP Calculation: Regular
Monthly SIP: Rs 10,000
Duration: 20 years
Estimated return: 12 percent
Total investment: Rs 24 lakh
SIP value after 20 years: Around Rs 1 crore (Rs 99.91 lakh)
Estimated profit: Rs 75.91 lakh
SIP Calculation: TOP-UP SIP
Initial monthly SIP: Rs 10,000
Duration: 20 years
Estimated return: 12 percent
TOP-UP every 1 year: 10 percent
Total investment: Rs 68.73 lakh
SIP value after 20 years: Rs 2 crore (Rs 1.99 crore)
Estimated profit: Rs 1.30 crore
SIP TOP-UP: What is the expert’s opinion
BPN Fincap Director Amit Kumar Nigam says, the outlook for the market looks better. In this, along with regular SIP, the formula of TOP-UP SIP can give you tremendous benefits. Actually, TOP-UP SIP is a facility in which you can add some amount to your regular SIP every year. For example, as your salary is increasing every year, you top-up some amount in SIP every year in that proportion. Through TOP-UP SIP you can achieve your investment goal quickly and easily.
(Disclaimer: There is no advice to invest in mutual funds here. Consult your advisor before taking any investment decision.)
