Banks offer investment options, letting individuals grow and manage their wealth. Investments range from traditional fixed deposits and recurring deposits to mutual funds. One of the most popular methods of investing in mutual funds is SIPs, but before that, you should have basic knowledge about the types of SIP investments.
In this regard, it’s worth noting that different types of systematic investment plans help the investor benefit from Rupee Cost Averaging. A Systematic Investment Plan (SIP) allows individuals to invest in mutual funds by making regular, fixed-amount contributions, with the intervals of deposit varying based on the user’s convenience.
This method provides a structured approach to investing, providing one the convenience of leveraging rupee cost averaging while promoting disciplined investing over time. The user can depend on the power of compounding. The flexibility in investment amounts and cost-effectiveness adds to the benefits.
According to some latest reports from ICRA Analytics, despite market fluctuations, Indian retail investors have grown quite confident in SIPs. Based on the updated information in April 2025, collections reached ₹26,632 crore, the highest since January, representing a 2.72% increase from March.
It’s a well-known fact that there are various types of SIP investments to achieve your financial goals, and here we will discuss them.
Understand the different types of Systematic Investment Plans
Besides the Regular SIP with a fixed monthly investment amount and tenure, letting you develop a disciplined investment approach and build wealth over time, it’s worth having a good understanding of other types of SIP investments to consider. The top types are as follows:
- Regular SIP
Regular SIPs as a form of online SIP investment let you invest a fixed amount regularly for a desired investment period. The choice of this SIP option will serve as the simplest type. All you need to do is be disciplined in the approach, and with that, you can be assured of accumulating a large corpus with small regular contributions.
The most popular method of SIP with a fixed monthly investment amount and tenure helps you stay in line with market volatility through rupee cost averaging. With adequate knowledge regarding the types of SIP investments, you can make your SIP investment monthly, bi-monthly, quarterly, or half-yearly.
Regular SIP is suitable for any individual with a disciplined investment approach where there’s the convenience of choosing the SIP duration, instalment amount, and frequency. However, the only drawback in this option is that you cannot change the investment amount during the tenure of the investment.
- Top-up SIP
Top-up SIPs are also referred to as step-up SIPs, letting you increase your SIP contribution periodically. Why you need to prefer Top-up SIP is that there is scope to generate more wealth compared to regular SIPs. There is an opportunity to invest more every year incrementally.
Why this option in the list of types of systematic investment plans stands out is that it allows investors to increase their monthly investment amount by a fixed percentage annually. So, it becomes effortless to align investments with growing income. Investors will find it feasible to build a larger corpus over time.
If you are having long-term goals, depend on Step-Up SIP as that serves as a flexible way to enhance savings systematically. With this option, you can rest assured that the investments grow in line with your financial capacity.
- Flexible SIP
Flexible SIPs, as a type of systematic investment plan, offer the convenience of making changes to your SIP investment without having to go through hassles. Effortlessly take the opportunity to make the changes in the form of an SIP amount or the frequency.
However, an important point to note here is that you should communicate this change one week before the next due date of the SIP. One of the benefits is that, based on market conditions, there will be scope to increase or decrease your SIP contributions.
For your understanding regarding the types of SIP investments, let us take a scenario as an example – when markets are high, grab the opportunity to decrease your SIP. In the case you notice there’s a falling market, consider increasing your SIP. Now, there’s yet another scenario worth consideration, when there is a change in your income, you will find the opportunity to increase or decrease SIPs accordingly.
- Perpetual SIP
Perpetual SIP, as finest types of SIP investment, holds some similarity to regular SIP. But there’s a difference in the manner that Perpetual SIP does not have a fixed investment tenure. Now, if you are curious about the advantage, let us inform you that you will get the advantage with long-term compounding.
With the choice of this investment option, you don’t have to keep worrying about SIP renewals. Also, you will find the convenience of redeeming your investment anytime.
- Multi SIP
Among types of systematic investment plans, a multi-SIP will allow you to invest in multiple schemes of the fund house through a single SIP. The procedure of investing is less tedious as well. All you will have to do is use one form and one set of paperwork and initiate multiple SIPs.
Speaking about the advantage, it can be said that multi-SIPs, as a suitable option among different types of SIP investments, enable investors to diversify their portfolios. Having more than one Mutual Fund scheme through a single SIP plan is ideal for those looking to spread their investment risks. You can count on the portfolio’s stability and potential returns.
- SIP with Insurance
When you are looking for online SIP investment, it’s worth having an idea regarding SIP with Insurance. This is the option where you will get the benefits of both SIP and insurance. Get a lump sum payment in case of the investor’s untimely death during the investment period.
However, one of the important points to consider with these types of systematic investment plans is that the coverage amount may vary as on the amount invested. Also, an advantage here is that investors do not have to bear any insurance expenses directly or indirectly.
When there are cases of sudden demise of the investor, the nominee(s) receive the proceeds if the investor did not discontinue the SIP or redeem the amount within the period.
- Equity SIP
If you’re looking for types of systematic investment plans, note that the Equity SIPs involve investing in equity mutual funds at regular intervals. The SIP option is quite favourable among investors lately as it allows them to take advantage of a systematic approach.
With the choice of this online SIP investment, it feels effortless to mitigate market volatility. When looking forward to investing in SIPs, note the point that Equity SIPs are suitable for long-term wealth creation. THE POWER OF COMPOUNDING makes it even better for a high-risk tolerance investor who wants to put in the lump sum amount.
But this option isn’t much recommended for a first-time or naïve investor. Regardless of your proficiency, however, there will be chances for you to take the risk for the opportunity to purchase shares periodically in a systematic manner. With that, there will be an opportunity for you to buy more units when the markets are down, while possibility to buy fewer units when the markets are up.
- Debt SIP
In the list of common types of SIP investments, there are Debt SIPs that focus on investing in debt mutual funds. The investment here is primarily in fixed-income securities like bonds and government securities. Why these SIPs are one of the preferred choices is that they provide regular, stable returns with lower risk than equity SIPs.
The online SIP investment option is ideal for conservative investors looking for a steady income and capital preservation long term. Note that similar to equity SIPs, an SIP in debt funds makes it effortless to spread investment over time. Consequently, it becomes effortless to handle any market volatility that may affect the value of the investment.
Debt funds are also referred to as Fixed Income Funds or Bond Funds that come with a low-cost structure. In addition, they offer relatively stable returns, hold relatively high liquidity, and are reasonably safe.
- Tax-Saving SIP
Tax-saving SIPs as a top choice allow the investor to invest in Equity-Linked Savings Schemes. The advantage here is that one can enjoy the tax deductions under Section 80C of the Income Tax Act. Depending on this investment option means you will find the potential for capital appreciation, which in turn reduces taxable income.
Usually, this online SIP investment option comes with a lock-in period of three years, letting you enjoy the benefits of tax savings and equity investment growth. So, you can consider investing in tax-saving SIP plans, letting you take advantage of rupee cost averaging and the power of compounding.
There will be higher returns over time. It serves as an excellent investment solution, allowing investors to save taxes while also building financial security.
So, Which Is the Best Type of SIP?
No “one-size-fits-all SIP” is practically available. When you are looking forward to the right online SIP investment, it depends on your “requirement, income, and financial goals”.
Yet, regarding a recommendation can be said that regular SIP is suitable for most investors, especially those with a regular income. It goes perfectly well for salaried people.
Again, step-up SIP as an online SIP investment option is suited for salaried individuals. However, the difference lies in the manner that here the objective is to generate more wealth with rising income levels. Investors with a deep understanding of the market can earn a higher return depending on market fluctuations.
The ones who should go with the choice of perpetual SIP are the investors with no specific investment duration or goals in mind.
Regarding multi-SIP, it can be said that this option is suitable for investors looking forward to investing in multiple funds of the same fund house.
The list of types of systematic investment plans includes SIPs with an insurance plan, as one of the suitable options for investors who want to accumulate wealth in addition to having life insurance coverage.
Conclusion
Now that we’ve discussed the different types of SIP investments and how each differs from the other, you can draw an understanding of the SIP that will allow you to buy more units as the market goes down, while buying fewer units as the market moves up. So, give up second thoughts, become a disciplined investor, and begin SIP to contribute a certain amount to a mutual fund, and that habit is cultivated.
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