Topping up your SIP to reap maximum benefits in the long term

Topping up your SIP to reap maximum benefits in the long term

When your income grows, you also have more money available for investment purposes. In these cases, a SIP top-up will help you to increase the monthly investment now and then. SIP top-ups can be specified either as a percent or as a fixed amount every year. Even a small increase of INR 500 will make a huge impact in your portfolio in the long run. 

Here are the key benefits of topping up your SIP that you can enjoy. 

  1. Better adaptability to rising income 

The increment or bonus that your employers offer regularly can be used to top up your existing SIP. Thus, there is a better adaptability here. 

  1. Helps reach your financial goals

SIPs help to achieve your long-term financial goals with ease. A top-up facility will allow you to reach your financial goals faster, or to expand them to meet your needs. Your income will grow over the years, therefore consider investing more in existing plans to build more wealth. 

  1. Fights inflation

A lot of investors prefer to increase their contribution to be able to battle inflation. Since inflation erodes the value of your money, it is sensible to raise your contribution amount to plan investments for the long term.  

  1. Allows the investor to stay invested in their plan rather than opening a new one

A top-up facility will help to save you from the hassle of managing numerous SIPs. When there is a sudden rise in your income or an unexpected new source of earning; it is best to invest it systematically. Looking for new investments can be a tedious task, and cost you a lot of time too. The better option, therefore, would be to top up your existing investment. 

All in all, top-up SIPs have greater return prospects and will gain your trust. In the long run, they will help you gain financial stability, and also equip you to deal better with the uncertainties of the future. 

Be aware and educated

Investors should make sure that they deal only with registered mutual funds. These details can be verified on the SEBI website under the Intermediaries/Market Infrastructure Institutions. The website will give you detailed information about completing the KYC process, the change of details like contact number and address, change of bank details, etc.