Thread: SIP or MIP??? wth!!!

SIP (Systematic Investment Plan): A way of investing in stock markets. In SIP, you invest a certain amount each month (as low as Rs 100!) into the equity mutual fund of your choice. The SIP amount is debited from your account on specific dates (set by you). SIPs can be started during any month. We’re not offered any unique special incentives by any Mutual Fund company to focus this month on SIPs.
Basically SIPs are a way or method of investing in Mutual Funds.

MIPs stands for Monthly Income Plans offered by Mutual Funds. Mutual Funds offer this unique product which normally invests around 75% to 80% of the assets in Debt like Government Securities, Commercial Papers, Certificate of Deposits, Credit agency rated bonds etc. They have the mandate of investing upto the balance 20% to 25% in Equity. They also have the option of staying 100% invested in pure debt, if the fund manager feels that it is not advisable to have equity exposure at a given point of time.

For your knowledge "SIP is a method and MIP is a product."
MIPs basically aim at protecting capital and also enhance the return over and above what one normally gets out Fixed Deposits and Postal Products.
In MIP the minimum holding period recommended is 5 years, to get a significant return over above a Fixed Income product. Also MIP's offers good tax advantages. Dividents from MIPs are tax free.