Voluntary Accumulation Plan


DEFINITION of 'Voluntary Accumulation Plan'

An investment method in which a retail investor periodically invests (at its discretion) relatively small amounts of funds into a mutual fund, building a large position over an extended period.

BREAKING DOWN 'Voluntary Accumulation Plan'

By investing savings into a mutual fund gradually over time with a voluntary accumulation plan, an investor can build a large investment at his or her own pace. Contributions are voluntary, although common practice is to invest a fixed amount at specified intervals. By spreading the contributions over a period of time, investors reap the benefits of dollar-cost averaging, as the fixed contributions will buy more shares of a mutual fund when its price is low than when it is high.

  1. Dollar-Cost Averaging - DCA

    The technique of buying a fixed dollar amount of a particular ...
  2. Retail Investor

    Individual investors who buy and sell securities for their personal ...
  3. Accumulation

    1. An individual investor's cash contributions to invest in securities ...
  4. Savings

    According to Keynesian economics, the amount left over when the ...
  5. Automatic Investment Plan - AIP

    An investment program that allows investors to contribute small ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
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  2. How do mutual funds compound interest?

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  3. Do mutual funds pay interest?

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  4. Why have mutual funds become so popular?

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