Exploring the Vast Variety of Systematic Investment Plans

In the realm of investment, one investment tool that has gained prominence over the years is systematic investment plans, commonly known as SIPs. SIPs offer a simplified and disciplined approach to wealth creation and financial planning, making them an attractive choice for both seasoned investors and newcomers to the world of finance.

When it comes to investing in mutual funds, investors flock to SIPs because of their systematic and disciplined approach. However, SIPs are more dynamic than they may seem and come with many variations and options. Let us discuss a few of them:

1. Regular SIP:

Regular SIP involves investing a fixed amount at predetermined intervals, usually monthly. It instils financial discipline by committing you to invest a specific sum regularly, regardless of market conditions.

It’s an excellent choice for individuals looking to cultivate a disciplined approach to savings and investment. Over time, it allows you to benefit from rupee cost averaging, where you buy more units when prices are low and fewer units when prices are high.

2. Flexi SIP:

Flexi SIP offers the flexibility to invest varying amounts at periodic intervals. It accommodates fluctuations in your financial situation, enabling you to increase or decrease your investment amount as needed.

Ideal for those with irregular or fluctuating incomes, Flexi SIP ensures you can continue investing even during challenging financial periods. It provides adaptability and control over your investment contributions.

3. Top-Up SIP:

A Top-Up SIP allows you to periodically increase your investment amount, typically on an annual basis. It’s an excellent choice for individuals who anticipate salary increments or bonuses and want to boost their savings accordingly.

This SIP type ensures that your investments keep pace with your growing income, maximizing your wealth accumulation potential and capitalizing on your financial growth.

4. Perpetual SIP:

In a perpetual SIP, you continue investing indefinitely without specifying an end date. It is particularly suited for long-term financial goals like retirement planning, where you want to keep accumulating wealth without interruption.

Perpetual SIPs offer a hassle-free way to secure your financial future. They ensure your investments persist over the long haul, harnessing the power of compounding for substantial wealth creation.

5. Trigger SIP:

Trigger SIPs enable you to set predefined triggers based on market conditions or specific events. For instance, you can configure it to buy more units when the market dips or sell when it reaches a certain high.

This SIP type empowers you to implement a systematic approach that reacts to market dynamics. It can help optimize your investment strategy by automating buy and sell decisions.

6. Flexible Withdrawal SIP:

Unlike a regular SIP, a flexible withdrawal SIP lets you redeem your investments partially or fully as per your needs. This flexibility is beneficial for investors who anticipate occasional liquidity requirements.

It offers financial freedom by allowing you to access your investments when necessary without disrupting your overall SIP. It is also ideal for handling unforeseen expenses or capitalizing on investment opportunities.

7. Capital Appreciation SIP:

Capital appreciation SIPs are tailored for wealth accumulation through capital appreciation, rather than regular income generation. They focus on long-term growth and wealth creation.

If your financial goal is to build substantial wealth over time, this SIP type aligns with your objectives. It prioritises capital appreciation, making it suitable for those with a longer investment horizon.

8. Goal-Based SIP:

Goal-Based SIPs are customised for specific financial goals, such as purchasing a home, funding education, or taking a dream vacation. You determine the investment amount and tenure based on your goal’s timeline and financial requirements.

This SIP type offers clarity and purpose to your investments. It ensures that you allocate the right resources to meet specific financial objectives, making your goals more achievable.

9. Tax-Saving SIP (ELSS):

Equity-Linked Saving Schemes (ELSS) are SIPs that offer tax benefits under Section 80C of the Income Tax Act in India. They come with a lock-in period of three years, making them a popular choice for tax-saving purposes.

ELSS SIPs provide dual benefits of potential wealth accumulation and tax savings. They are an efficient way to reduce your taxable income while participating in equity market growth.

10. Sectoral SIP:

Sectoral SIPs focus on a specific sector or industry, allowing you to invest in businesses related to your area of interest or expertise. However, they tend to be riskier due to their concentrated exposure.

Sectoral SIPs provide targeted exposure to sectors with growth potential. They suit investors with industry-specific insights and a higher risk appetite.

Which SIP Should You Invest in In 2023?

Considering all the options available, it can be difficult to determine which type of SIP is best for you and which is unsuitable. Follow these examples to better understand how you can pick the SIP type that best suits your needs:

SituationBest ChoiceBest Avoid
You are a self-employed individual or a gig workerFlexi SIPFlexi withdrawal SIPRegular SIP
You  have started earning only recentlyRegular SIPTop-up SIPPerpetual SIP
You want to start saving for retirementPerpetual SIPCapital-appreciation SIPTrigger SIP
You are a market trader/professional investorTrigger SIPSectoral SIPRegular SIP
You are risk-averse individualRegular SIPPerpetual SIPSectoral SIP
You want to build a substantial corpus for your family/dependentsCapital Appreciation SIPTax-Saving SIP (ELSS)Sectoral SIP
You want to invest in insurance and the market at the same timeTax-Saving SIP (ELSS)Any other SIP type


SIPs provide a versatile and accessible way to invest, regardless of your financial goals and risk tolerance. By choosing the right type of SIP that aligns with your objectives, you can embark on a structured journey towards wealth creation, financial stability, and achieving your long-term aspirations. Remember to consult a financial advisor or professional before making investment decisions to ensure they align with your unique financial situation and goals.


Frequently Asked Questions (FAQs):

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Amit Arora

I am a seasoned retail banker with over 21 years of global experience across business, risk and digital. In my last assignment as Global Head Digital Capabilities, I drove the largest change initiative in the bank to deliver the end-to-end digital program with over US$1 billion in planned investment. Prior to that, as COO for Group Retail Products & Digital, I implemented a risk management framework for retail banking across the group.
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