For retail investors, a systematic investment plan (SIP) is an ideal way to invest in equity, debt or even gold to create a long-term corpus. One can invest small sums of money every month or quarter over a period of time and earn compounding returns.
In SIPs, an investor will have to continue to invest till the period mentioned at the time of opening the account. However, in order to give flexibility to investors to tide over any cash flow issues, asset management companies (AMCs) offer the option to pause the SIP for a limited period of time. This ensures that the investor does not have to prematurely close the account and lose on the returns.