Systematic investment plan
A systematic investment plan (SIP), also known as an "automatic investment plan", "pre-authorized purchase plan", or "regular investment plan", is an mechanism to automate regular purchases of securities or mutual funds. Essentially, a SIP is a form of dollar cost averaging, so you buy more shares or units when they are cheap, and fewer when they are expensive. Enrolling in a SIP helps maintain savings discipline: by transferring money out of your chequing account automatically and regularly, you are making sure that investing remains a priority in your budget.
Mutual funds directly from the company
Mutual fund companies typically offer pre-authorized purchase plans that allow regular contributions to be made effortlessly, often starting at $25 per investment period (e.g. weekly, monthly, quarterly, etc.).
Mutual funds in brokerage accounts
Many brokerage firms also offer SIPs where you can purchase mutual fund units from many of the leading fund companies and avoid the higher minimum investment amounts frequently required by these companies and brokerage commissions.
Companies listed on stock exchanges that offer dividend reinvestment plans sometimes offer SIPs, which allow additional shares to be purchased directly from the company's transfer agent, thus saving on brokerage commissions.
- Rob Carrick, A painless antidote to investing procrastination, The Globe and Mail, October 3, 2011
Mutual funds directly from the company (examples)
- TD mutual funds, Pre-authorized Purchase Plan - applies to TD e-funds as well
- CIBC: Benefits of a Regular Investment Plan - applies to CIBC index funds as well
- PH&N - The Power of Investing Regularly
Mutual funds in brokerage accounts (examples)