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Does SIP have a lock in period?

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Does SIP have a lock in period?

SIPs themselves don't have a lock-in period. SIP, or Systematic Investment Plan, is simply a method of investing a fixed amount regularly into mutual funds.

Does SIP have a lock in period?

Whether or not there's a lock-in period depends on the type of mutual fund you invest in. Most SIPs are associated with open-ended mutual funds, which typically do not have a lock-in period. This means you can redeem your investments anytime you want without any restrictions.

However, there are certain types of mutual funds, like Equity Linked Savings Scheme (ELSS) mutual funds, which do have a lock-in period. ELSS funds have a lock-in period of 3 years, which means you cannot redeem your investments before completing 3 years from the date of investment. This lock-in period is designed to encourage long-term investment and tax saving.

Mutual funds that have lock-in periods are often referred to as close-ended mutual funds.

So, in summary, while SIPs themselves don't have a lock-in period, the mutual funds you invest in through SIP may have one, depending on their type and investment objective. It's essential to understand the terms and conditions of the mutual fund scheme before investing through SIP. 

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