There’s a top-up for everything under the sun, well almost. Right from your mobile phone recharge, to your home loan, to your health insurance plans.
Did you know that there’s a Top-up even on your Mutual fund SIP?
In a SIP, you usually invest a fixed amount every month, and the month after month investing helps you accumulate wealth over the long term.
*A Top-up SIP offers flexibility to your investment* enabling you to bump-up the monthly investment amount. It can be either a specific percentage of your original SIP amount or even a predetermined fixed amount.
*Here are four reasons as to why a Top-up SIP is a good idea*
*1. Increasing Income Adjustment:*
How much an individual can invest depends on his or her income. The amount you invest in an SIP at the beginning of your career is usually smaller, as your income is much lesser.
As your income increases every passing year, either in the form of increment or an annual bonus; this extra amount can be easily invested as a Top -up to an existing SIP.
*2. Speeds up meeting your financial goals:*
Increasing your investments even by little never hurts. In fact, increasing investments is always a good idea as it helps one reach one’s goals faster.
*3. Fights the inflation monster:*
Inflation is your biggest enemy when it comes to your investments. The average rate of inflation has been 6.5 % pa for last 20 years. As inflation consistently erodes the value of your money, it may be prudent to raise contributions to an investment plan for the long-term.
*4. It’s easy and hassle free:*
Starting a new SIP would require you to go through the additional hassle of tracking or managing multiple SIPs. You may not have the time to research a new investment opportunity. A Top-up SIP to an existing investment is an easy and efficient option.
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