Topic 3 of 9~5 min read

Perpetual SIP

Definition

A Perpetual SIP is a Systematic Investment Plan set up without a specific end date. Unlike time-bound SIPs that run for a fixed period (say 5 or 10 years), a perpetual SIP continues indefinitely until the investor explicitly stops or cancels it.

In Simple Words

When you set up a SIP, you usually specify a start date and end date. A perpetual SIP has a start date but no end date — it runs "forever" (until you cancel). This is ideal for long-term wealth building because it removes the mental friction of renewing SIPs and ensures continuous compounding.

Real-Life Scenario

Sunita started a perpetual SIP of ₹5,000/month in 2010. She never had to renew it. By 2025, without any intervention, her SIP ran for 15 years continuously. She invested ₹9,00,000 and her portfolio grew to approximately ₹25,48,000 at 12% CAGR. If she had set a 5-year SIP, she would have needed to renew twice and might have missed months during transitions.

Key Points to Remember

No end date — runs until explicitly cancelled by investor

Removes the hassle of SIP renewal every few years

Ideal for open-ended goals like wealth creation

Ensures continuous compounding without breaks

Most AMCs default to perpetual SIP if no end date specified

Can be stopped anytime without penalty

Auto-debit mandate may need periodic renewal (every 5-10 years)

Combine with step-up for maximum long-term impact

Frequently Asked Questions

Test Your Knowledge

1 questions to check your understanding

Question 1 of 1Score: 0/0

What is the key advantage of a Perpetual SIP over a fixed-tenure SIP?

Summary Notes

Perpetual SIP = Set it and forget it approach

Ideal for long-term wealth building with no specific end goal date

Combines well with step-up SIP for optimal growth

Check auto-debit mandate validity periodically