Upstox provides fund plans which are as below -
1. Dividend Payout: A dividend payout scheme disburses dividends directly to mutual fund shareholders. Shareholders can opt to receive dividends in their cash account, electronically in their bank account, or by cheque. Dividends can be distributed quarterly, monthly, annually, or semi-annually.
An equity fund that focuses on dividend yield is called a dividend yield fund. Investors looking for lower volatility may opt for dividend payout plans and consider investing in these companies because they are generally stable.
2. Dividend Reinvestment: On the date of the dividend payment, a dividend reinvestment plan (DRIP or DRP) allows shareholders to automatically reinvest their cash dividends in additional shares of the company.
Investors can gradually grow their holdings over time without requiring extra cash investments. This approach is beneficial for those with limited funds. Additionally, it enables investors to leverage compounding advantages, as dividends earned on additional shares can be reinvested, leading to further shares and dividends.
Note: Dividend payout and dividend reinvestment option may not be available for all mutual fund schemes. Schemes may have a dividend payout option but may not have the reinvestment option.
3. Growth: Opting for the growth plan in a mutual fund indicates that investors won't receive any dividends distributed by the stocks in the fund. In this plan, the fund's profits are reinvested in its underlying securities, fostering future growth and increasing the fund's overall value.
Investors seeking long-term wealth appreciation, especially through equity investments where all returns are reinvested, can choose the Growth plan.