Definitions for "Automatic Investment Plan"
A program that allows an individual to have a set amount electronically transferred from one account to another at a specified frequency. Examples include stock and mutual fund reinvestment programs, defined contribution plans, mutual fund contribution programs, and automatic withdrawal plans. also called systematic investment plan.
A plan offered by most mutual funds where as little as $50 a month is automatically deducted from an investor's bank account and invested in the mutual fund of their choice.
Under these plans, the investor mandates the mutual fund to allot fresh units at specified intervals (monthly, quarterly) against which the investor provides post-dated cheques. On the specified dates, the cheques are realised by the mutual fund and on realisation, additional units at the prevailing NAV are allotted to the investor. This inculcates a healthy and disciplined saving habit.
Keywords:  reinvestment
Automatic Reinvestment
See periodic payment plan.
See Systematic Accumulation Plan.