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Consider the following statements regarding Mutual Fund’s Systematic Investment Plan (SIP):
  1. Under SIP, an individual investor can invest a fixed amount in a chosen scheme periodically at fixed intervals
  2. Full and partial withdrawal is possible only after the SIP tenor.
Which of the statements given above is/are correct?
  • a)
    1 only
  • b)
    2 only
  • c)
    Both 1 and 2
  • d)
    Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements regarding Mutual Fund’s System...
Contributions to mutual fund schemes through systematic investment plans, or SIPs, remain unfazed from the market volatility in 2022 with inflow growing to ₹1.5 lakh crore in 2022, a surge of 31% from a year earlier, due to higher retail participation.
What is a Systematic Investment Plan (SIP)?
  • SIP is an investment methodology offered by mutual funds wherein an individual saver can invest a fixed amount in a chosen scheme periodically at fixed intervals - say once a month, instead of making a lump sum investment.
  • The SIP installment amount can be as small as ₹500 per month and is similar to a recurring deposit.
Benefits of SIP:
  • SIPs are done in open-ended funds where the investors can invest and take out the money anytime.
  • There is no fixed tenor for running SIP. Once the SIP tenor is fixed, it can BE stopped in between or could be continued even after the tenor by placing the request with the respective mutual fund company.
  • Full and partial withdrawal is possible during or after the SIP tenor.
  • The SIP amount can be increased or decreased.
Hence only statement 1 is correct.
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Consider the following statements regarding Mutual Fund’s Systematic Investment Plan (SIP): Under SIP, an individual investor can invest a fixed amount in a chosen scheme periodically at fixed intervals Full and partial withdrawal is possible only after the SIP tenor.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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