SIP plan is better for such people who do not want to invest directly or outright in the stock market.
SIP or Systematic Investment Plan has become the most popular way to invest in mutual funds. Its name suggests that under this, you can deposit a fixed amount in different installments according to your convenience in a mutual fund of your choice.
SIP or Systematic Investment Plan is better for people who do not want to invest directly or outright in the stock market. Let us know here how SIP can be taken online and what are its other important things.
Let me tell you that there are many such SIP schemes in the market in which investors can start their investment from 500 rupees.
Start online SIP in this way
To start SIP, you need PANCORD, ADDRESS PROOF, PASSPORT SIZED PHOTOGRAPH and CHECKBOOK. Explain that the KYC process is mandatory to invest in mutual funds. To start an online SIP, you can go to the website of a fund house and choose the SPI of your choice. For this, your KYC rules have to be fulfilled first.
For the new account, you have to go to the Register Now link. Before submitting the form, you will have to fill all your personal details and contact information here.
For online transaction, you have to create a user name and password. Apart from this, you will also have to provide bank account details for debit of SIP payment. After that you can choose the scheme of your choice after logging in with your user name.
SIP can be started after the registration is completed and its confirmation from the fund house. SPI usually starts after a 15 to 40 day gap.
Benefits of SIP
SIP is a better option for new or old investors who want to reduce market risk, starting investing in equity or debt funds. Through this, we can invest in small amounts and installments in the market without any hassle.
Under this, the fund house can also avail auto debit facility from bank account by giving SI (Standing Instruction) which will automatically deduct the installment amount from your bank account every month.
In SIP, you get the benefit of compounding (ie compound interest), that means if you invest 1000 rupees in a mutual fund at a return rate of 10%, then the interest earned by you in a year will be 100 rupees. So next year your interest will be earned on the basis of 1100 rupees.
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