SIP amount does not get credited to the savings account until you redeem funds

I am new to mutual funds and I invest ₹5,000 in one scheme. I am at the 23rd instalment out of total 24 instalments. What will happen after the 24th instalment is also paid? Will the systematic investment plan (SIP) get renewed automatically or will the entire money get credited to my bank savings account? I increased my SIP amount by ₹10,000 and the statement this month says instalment (1/961) and shows both these SIP amounts separately. Will both these SIPs continue? What should I do? I don’t mind continuing to invest ₹15,000 in this scheme. If it is not wise, I can start another SIP for ₹5,000 in another scheme.

—Subhansh Shah

SIPs are one of the most flexible and investor-friendly options for disciplined and regular investing. However, there are a lot of apprehensions about SIPs that are not true. The key thing to remember about SIPs is that, as an investor, you are always in charge, and you can control your investments the way you like. That said, of course, it would be in the interest of the investor to let an SIP operate in a pre-programmed way without much intervention from the investor for it to produce the best returns.

Now, to answer your question, it looks like you have started two SIPs—one 24 months back, and one recently—one for ₹5,000 and one for ₹10,000. Your first SIP will end next month (after the 24th instalment), and the money in that investment will stay there. It will not get credited to your bank account until you ask for a redemption.

Your second SIP will continue, it appears, for 960 more instalments (or 80 years). It looks like it’s a perpetual SIP programmed to run until the end of this century.

My advice to you would be this. If you like the scheme that you have an SIP for, let your ₹10,000 SIP continue. If you can invest ₹15,000 a month, please do so, but by choosing two or three mutual funds outside of your first fund.

You need a diversified portfolio with funds across categories and fund houses to make for good returns. Look at Mint50 schemes to choose good funds to go with.

Srikanth Meenakshi is co-founder, PrimeInvestor.in.