Minimum additional investment

Most mutual funds set minimum amounts for investing in a scheme. Such a threshold may be applicable on initial as well as additional investments. A minimum additional investment is the least amount of money that an investor needs to put into a scheme to continue participating in it after the initial investment has been made.

Minimum additional investment

All purchases in a fund may be subject to certain requirements. The minimal additional investment seeks to ensure that investors retain a consistent level of commitment to the fund across time. Just like the initial investment amount, the minimum additional investment amount can vary based on the scheme rules.

Minimum initial and additional investment in mutual funds

The minimum initial and additional investment amount varies depending on the fund and the investment method. Here are some examples:

New fund offers: Typically, some of the NFOs need a minimum initial investment of Rs. 5,000 per application. This allows investors to obtain enough units at face value.

Lump sum investment: The minimum investment for a lump-sum investment is variable and can range from Rs. 100 to Rs. 5,000 depending on the scheme.

Systematic investment plans: SIPs enable regular investments, with a minimum investment of Rs. 500 for each instalment. However, some funds also provide SIPs for as little as Rs. 100. Additional SIP payments can be tweaked based on the investor’s changing objectives and financial situation.

Conclusion

Most funds require investors to put in a minimum amount to join a scheme. Funds may also have a minimum additional amount – the lowest amount needed for subsequent investment in the scheme. Thus, it is important to understand these phrases.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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