A Systematic Investment Plan is a unique investment method that allows you to invest small sums of money regularly in the stock market. One of the primary advantages of an SIP investment is that you can customise almost every facet of the investment method. For instance, you can choose the amount that you want to invest each month, the tenure, and even the stock or mutual fund.
Secondly, Systematic Investment Plans help bring the investment risk down through the concepts of rupee cost averaging and compounding. These reasons are primarily why many investors choose to go the SIP-route when it comes to investing in the Indian stock market.
Now that you’ve been introduced to the concept of an SIP, is it possible to invest in one for a long tenure of say 30 years? If you’re looking for the answer to this question, here’s something that can help give you some clarity.
When you first opt for a Systematic Investment Plan, you will first be required to fill an application form. Here, you will be asked to enter the tenure for which you’re planning on continuing with the SIP. Usually, most investors tend to choose tenures ranging from about 5 years to around 10 years. Some mutual fund houses even allow you to choose a tenure that’s even longer than that as well.
That said, what if you wish to create a Systematic Investment Plan for a tenure that’s far longer than what most investors opt for? For instance, you may want to plan for your post-retirement life, which requires a significantly large corpus. To do this, you will have to opt for an SIP investment tenure of at least 30 years or more. So, how do you do it? Would you have to create a new Systematic Investment Plan each time your tenure of 5 or 10 years expires?
Fortunately, that’s not the case. With SIPs, there are multiple different types that you can choose from. One of them is a perpetual SIP. A perpetual SIP, unlike other kinds, does not come with an end date. The tenure is perpetual, meaning that you can continue investing in it for as long as you choose, even if it is for 30 years or maybe even more than that.
One of the major advantages of a perpetual SIP other than having no end date is the fact that it can be closed by you at any point in time. As a matter of fact, you may even choose to close such an SIP investment within just a few months from the date of opening as well.
So as you can see, it is possible to invest in Systematic Investment Plans for long tenures of 30 years and even more than that. You can make your dream of long-term wealth creation a reality by choosing to invest in a perpetual SIP. That said, to start one, you’re required to first open a demat account . If you don’t have one already, simply head over to Motilal Oswal to open one for free within just a few minutes.
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