Voluntary Accumulation Plan

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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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  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

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  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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