InvestmentMutual Fund

Is perpetual SIP a good investment option?

The ‘Mutual Funds Sahi Hai’ campaign launched by the AMFI has propelled a large number of Indians to invest in mutual funds. Systematic Investment Plan (SIP) flows into mutual funds have risen to nearly Rs. 8,000 crores in October 2018. This is a 42% rise from the same time last year according to a report by the Economic Times. With more investors putting their money in SIPs for higher returns, here’s how you can maximise your gains in the long term through perpetual SIPs.

What are perpetual SIPs?

When you invest in a mutual fund through SIP, you have the option to choose the tenure of investment. For instance, you can invest periodically in the SIP for six months, a year, 5 years or 10 years. You also have the option to continue investing in the SIP ‘forever. This is known as a perpetual SIP. The difference between a regular SIP and a perpetual SIP is that you don’t assign a pre-defined tenure for your investment.

Therefore, when you sign up for a SIP, if you leave the end-date column blank, fund houses assume you have opted to invest in a perpetual SIP. However, sometimes, fund houses may require you to tick the perpetual option if you wish to choose the path of investment. Moreover, once you sign up for a perpetual SIP, it means your investments can continue until December 2099. You can always terminate the SIP at any time by providing a written communication to your fund house.

Advantages of perpetual SIP

Avoid the hassle

Investing in mutual funds is a great way to increase your wealth. But to ensure that everything is in order, you need to take care of different formalities. It is common to find people who have yet to start a planned investment (or did not renew one) simply because they did not have the time to fill up forms or update their KYC details. You can avoid this trouble when you invest in perpetual SIPs. You don’t have to worry about renewals or operational hassle. Just continue your regular investments to meet your financial goals.

Investment discipline

The fundamental rule of a perpetual SIP is that you invest in the mutual fund regularly without fail. Whether you invest on a monthly, quarterly or semi-annual basis, you need to make the financial commitment on the pre-fixed date. This can help you attain the essential quality of investment discipline over time.

Long-term returns

An end-date is necessary for short-term goals such as planning a vacation next year or buying a car in 4 years. However, when it comes to longer financial goals such as creating a retirement corpus, it may not be a good idea to set an end-date. Nevertheless, when you invest in a good mutual fund consistently for 10, 20 or even 30 years, you can earn substantial returns. This method of long-term investment through a perpetual SIP reduces your risk exposure and maximises your profits.

Who should opt for perpetual SIP?

Perpetual means forever; and for a young 25-year-old investor who has just begun his professional career, the next 30-35 years can seem like a long, long time. This is why the perpetual mode of investment is most suitable for young investors. When you begin a perpetual SIP at a young age, you can continue your investments for another 3-4 decades without disturbing the flow. You don’t have to worry about renewals or meeting distributors from time to time. In comparison, an older investor nearing his or her retirement may want to shift the funds from mutual funds and invest in other options. He or she may not want to continue investing in SIPs even after retiring.


As an investor, you need to take control of your finances. And by investing through a perpetual SIP, you can enjoy the benefits of high yields in the long-term without trouble. You can simply provide a standing instruction to your bank account to transfer a specific sum into the fund on a particular date each month.

In other words, you can spend your time on other essential things while your investments work for you. However, you may want to monitor your fund from time to time to ensure its performance is up to your expectations. If you find the performance lacking, you can always stop the SIP and shift to another fund.

Vikas Agarwal
the authorVikas Agarwal
Vikas Agarwal is an IIT-Varanasi graduate in Chemical Engineering. He is the Founder and CEO of - an investment advisory website. He is a Business Development Professional but a Value Investor at heart. He writes articles on Finaacle, which focus on simplifying the art of investing and the causes of human misjudgment when it comes to investing. He also shares his experiences as an investor and lessons from some of the greatest investors of all time.

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