Kotak SIP Plan

Kotak SIP plan is one of the best ways for new investors to make an investment in the Mutual fund industry. Investors seeking long-term growth of their investment may consider the market of mutual funds via the Kotak SIP plan. The Kotak SIP investment plan offers multiple SIP options or schemes for an investor, which is worthwhile for new investors to grow their wealth over a long period. A Kotak SIP plan can be considered for various purposes in order to meet the financial goal of an individual.

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Let us understand the explanation of SIP.

SIP (Systematic Investment Plan)

SIP stands for a systematic investment plan, allowing investors to invest their funds regularly or at a predetermined interval. It enables the investors to select the best category of investment and choose the best SIP plans and schemes to make the investments of their fund in a stipulated time. For example, the regular interval in a SIP could be monthly, quarterly, or annually. However, in the Kotak SIP investment plan, the prescribed interval varies weekly, monthly, and quarterly.

Types of Kotak Mahindra Bank SIP Plan

It is crucial for the investor to understand the availability of SIP plans in Kotak Mahindra Bank to plan the investment premium at a prescribed period. This is because the types of SIP plans have evolved and have been able to gain the interest of investors over the years.

Let us understand the types in detail.

  1. Step-up SIP

    The Step-up SIP is also known as the top-up SIP, which allows the investors to increase the premium amount at regular intervals. For example, an investor earning INR 1 lakh per month in the previous year may save INR 20,000 for SIP investment. In addition, if the income increases by INR 30,000 in the assessment year, he may keep more and gradually increase the premium amount to accumulate a substantial amount in long-term planning. It helps an individual to earn a bonus on his investment. An investor may further utilize the reward for investment if he faces a windfall in his income due to uncertainties or ambiguities. A step up sip calculator can be used further to analyze the returns that can be earned.

  2. Flex SIP

    Flex SIP is also known as flexible SIP. As the name suggests, the investor under a flexible SIP plan may adjust the contribution of his premium. The flex SIP offers more control over the investment compared to the regular SIP plan. The Kotak SIP plan provides flexible SIP to investors who do not possess a steady source of income or are generally prone to a financial crisis. The investor under the flexible SIP plan in Kotak Mahindra Bank may adjust the premium amount according to the movement of the market. For example, if the market is performing well, he may increase his contribution, and if the performance is falling, he may decrease it in order to save his investment.

  3. Trigger SIP

    The Trigger SIP of Kotak SIP plan is a noteworthy scheme for experienced and knowledgeable investors with extraordinary knowledge about the market. With the trigger SIP, an investor may set NAV (Net Asset Value), index level, date, or an event when he is required to make the investment of his funds. In other words, one may take advantage of an anticipated period or an event by making the investment of his funds to earn a significant return. For example, suppose an investor knows that a specific government policy is going to launch and will affect the SIP to a certain level and cross certain marks, which will increase its value by a significant margin or percentage. In that case, it could be a trigger for an investor to make the investments. Thus, the investor is required to set a trigger target to make the investment. Therefore, it is advisable for the investor to get exceptional knowledge about the market before making an investment or selecting the trigger SIP plan in Kotak Mahindra Bank.

How Does the Kotak SIP Plan Work?

The following examples are listed below to understand how the Kotak SIP investment plan works.

  • If an investor has the potential to invest INR 25,000 monthly for a period of 15 years, he may accumulate INR 1,18,98,285 at the end of the 15 years.

  • However, INR 25,000 can only be invested by the investor who earns at least INR 75,000 per month. Nevertheless, according to the SIP plan in Kotak Mahindra Bank, an investor may start with INR 500. Therefore, if he determines to invest INR 500 per month for a period of 15 years, he may earn INR 2,37,996 at the end of 15 years.

  • In addition, if the investor invests INR 1,000 per month for a period of 15 years, he may easily generate INR 4,75,931 at the end of the 15th year.

  • However, if the investor increases the period and invests for 20 years, he may accumulate INR 9,19,857. The amount grows to almost double the amount. It is known as the power of compounding under the Kotak SIP plan.

The interest rate in the Kotak SIP plans generally varies from 9 to 18 percent annually. Hence, 12 percent may be taken as an average interest to calculate the returns and total amount an investor will receive in specific years. Accordingly, the aforementioned accumulated amounts have been estimated at an interest rate of 12 percent. In addition, the interest rate is subject to increase or decrease; hence the accumulated amount could be higher than shown above.

Top Up SIP Plan in Kotak Mahindra Bank

It is important to note that the investment never remains static; plus, an investor must gradually increase the premium of investment with an increment in income or salary. A gradual increase in premium may lead to accumulating more than the expected income. Therefore, the top-up SIP plan in Kotak Mahindra Bank sounds more practical than the regular plan.

Conclusion

The Kotak Mahindra Bank SIP plan is one of the best options to invest funds in and enter the market of mutual funds. Investors must get rid of traditional or conventional plans to double their returns. The Kotak Mahindra Bank SIP plan offers several choices to investors to select an appropriate scheme of a desired category for the investment of their funds. In addition, the investors may avail of several types of the Kotak SIP plan or may select one to fulfill their financial requirements.

FAQ's

  • What dreams may be fulfilled by investing in the Kotak SIP plan?

    An investor may fulfill various personal dreams or goals by investing in the Kotak SIP plan. The objectives could be a dream holiday with family or friends, the future of a child or children, a luxury car, or a house. However, the main objective behind investment in Kotak Mahindra's best SIP plan is to plan for retirement by meeting the financial requirements.  
  • What are some crucial details that an investor must get acquainted with before investing in the Kotak SIP plan?

    Listed below are the essential details one should understand before investing in Kotak SIP investment plans.
    • The minimum amount one may consider investing may vary from INR 500 to INR 1,000.
    • The minimum installment in a SIP plan should be six. However, it could be higher in some other schemes.
    • The frequency under the Kotak SIP plan is monthly and quarterly.
    • The payment date varies as 1, 7, 10, 14, 15, 25, 28, and 30th days of every month.
  • Can I stop the SIP installment for some time?

    In case of a financial emergency, one may consider pausing to pay an investment premium. The pause SIP is another type of Kotak SIP plan which allows the investor to stay with the investment instead of stopping it or withdrawing from it altogether. It will not impede the wealth creation planning of an investor. In addition, the investor may resume paying installments after getting rid of the financial crisis. However, it is significant to note that the investor has to undergo the approach of restarting the SIP plan after pausing it. Further, the investor can only pause the payment of installments for a period of 1, 2, or three months according to the current rule of the Kotak SIP plan. Nevertheless, it will be a complete relief for an investor to pause the SIP installment and re-continue after some time.
  • What are some of the best schemes/names of the Kotak SIP plan?

    Listed below is the list of schemes.
    • Kotak India EQ Contra Fund Growth
    • Kotak Standard Multicap Fund Growth
    • Kotak Bluechip Fund Growth
    • Kotak Tax Saver Scheme Growth
    • Kotak Equity Opportunities Fund Growth
    • Kotak US Equity Fund Growth
    • Kotak Emerging Equity Scheme Growth
    • Kotak Global Emerging Market Fund Growth
    • Kotak Small Cap Fund Growth
    • Kotak Infrastructure & Economic Reform Fund Growth
  • What is Perpetual SIP?

    A Perpetual is one of the types of SIP investment with no fixed tenure, and an investor may continue paying installments as long as he wishes and can stop the installment by notifying the fund house.
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