All You Need to Know About SIP 

India has seen certain trends in investing in the last few years. One of them is the increased acceptance and participation in mutual funds through Systematic Investment Plans (SIPs). 
The number of SIP mutual fund accounts in the country has been multiplying. As of June 2022, the SIP accounts stood at 5.55 crore. In the second quarter of this Calendar year alone, 59.50 lakh new SIPs were registered in the country.

How does SIP work? 

SIP is a method of investing in mutual funds. In SIPs, you invest a fixed amount of money at regular intervals over a period to achieve your financial goals. SIPs make it easy for retail investors to invest in equity and debt instruments.
Say you want to invest in stocks but don't have substantial capital. If you opt for a SIP in an equity mutual fund, you can start investing in the stock market with ₹500 every month. Doing this consistently for a few years can build enough wealth to meet your medium-term and long-term financial goals.
You can also choose the lump sum method to invest in mutual funds. Here, you invest in a fund of your choice in one go. The lump sum method is helpful if you have significant capital and understand market trends and price movements. 


How to start a SIP investment?

 

Here are some easy steps to answer how to start SIP investment -

Step 1 - Keep All The Necessary Documents Ready

You will need to make sure that you have all the necessary documents ready before you can invest. Since it is a long process, it is recommended that you start by keeping all the records ready that are required, including-

• ID Proof
• PAN Card
• Address Proof

Also, ensure your account number and bank account details are correct. A copy of your passport or driving license will be required as well. If you plan on making investments other than cash, then make sure that they comply with the current KYC norms the government sets.

Step 2 - Get Your KYC Done

Before investing in any financial product, it is critical to comply with KYC norms set by the government. To do so, you must fill out an application form at any of India's authorized banks or post offices where pre-paid cards are issued.

You can also apply online if you don't want to visit a bank branch personally or if there isn't one nearby where you live. The application form includes personal details such as name, address, photo ID proof (passport/driving license), and a declaration about the investment you are making.

Step 3 - Register For A SIP

To start investing in a Systematic Investment Plan (SIP), you first need to register with the Indian broker or financial advisor you wish to work with. Once registered, you can choose from a wide range of investment plans to suit your needs and risk profile.

Step 4 - Choose The Right Plan For Yourself

This is the most crucial step. If you do not choose the right plan, it won't be easy to get a good return on your investment. All plans are different and will have additional features and benefits.

Step 5 - Choose The Amount Which You Want To Invest

Choose the amount you want to invest in the scheme. It is essential to choose how much money you want to invest every month or every week. This will depend on how often you need money and how much it will be worth at any given time. 

Step 6 - Choose the Date of Your SIP

Select a date according to your convenience. One can choose multiple dates for various SIPs in a certain month.

Step 7 - Submit Your Form

Once you choose the mutual fund company, start the SIP by submitting the form online or offline (depending on your fund house).

You can submit your SIP online if you have an online Demat account. Alternatively, you can submit it offline through our office.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.