SIP expiry refers to the end date of a Systematic Investment Plan (SIP), after which the scheduled investments cease. According to the reference, a typical SIP has an end date after 1 Year, 3 Years, or 5 years of investment. However, some SIPs can be perpetual, meaning they don't have a fixed expiry date and continue until the investor chooses to stop them.
Understanding SIP Expiry
Here's a breakdown of SIP expiry:
- Fixed Term SIPs: These SIPs have a predetermined end date. The investor continues to invest a fixed amount at regular intervals (usually monthly) until this date. Common durations are 1, 3, or 5 years, as indicated in the reference.
- Perpetual SIPs: These SIPs, as stated in the reference, do not have a specific end date. The investments continue indefinitely until the investor decides to stop the SIP.
Key Considerations Regarding SIP Expiry
- Investment Horizon: The choice of SIP term (fixed or perpetual) should align with your investment goals and time horizon.
- Flexibility: While fixed-term SIPs offer discipline, perpetual SIPs provide more flexibility, allowing you to continue investing as long as desired.
- Withdrawal: As the reference notes, the investor can typically withdraw the invested amount whenever they wish, regardless of the SIP term, based on their financial goals and the specific terms of the SIP agreement.
In summary, SIP expiry defines when the systematic investments stop, either at a pre-defined date (in the case of fixed-term SIPs) or when the investor chooses to discontinue (in the case of perpetual SIPs).
