Systematic Investment Plan or SIP has become extremely popular among mutual fund investors with superior performance of equities over the last one year. An SIP is a simple tool that helps you to invest regularly in mutual funds. It is advisable to to invest in equity mutual funds only through SIPs as it negates the risk of timing the market as in lump sum investments & help to average your purchase cost ( negates market volatility) and maximize returns. The most important contribution of SIPs is the financial discipline it imparts on investors’ life as they compel investors to invest regularly irrespective of the market conditions.
One can start an SIP online in a mutual fund scheme through the following steps:
1. Having the necessary documents: You need some basic documents to start an SIP online – PAN card, Address proof (driving licence/bank statement/utility bill), Passport size photograph and a cheque book. The cheque book will come handy to provide your bank details. Having an Aadhar number is not mandatory but it could simplify the process. The whole procedure can be completed online at home.
2. Becoming KYC compliant: It is mandatory to comply with the Know Your Customer (KYC) requirements for investing in mutual funds. Basic information like name, date of birth, mobile number, address, etc are required. This is a one-time process only & once KYC compliant you can invest in multiple mutual fund schemes with different fund houses. You can become KYC-compliant online using the eKYC channel which can be completed online either through websites of certain fund houses or CAMS /Karvy directly. You should fill in basic information and upload a soft copy of your PAN and address proof to support the details filled in the first step. Finally, a video call will be scheduled to confirm your physical presence. You also have the option to complete the eKYC procedure using your Aadhar number. This will simplify the process as it pre-populates the form with your basic information and eliminates the need of a video call. However, it imposes a statutory investment limit of Rs. 50,000/annum/fund house.
3. Start the SIP online: Once you are KYC compliant, you can visit the website of the fund house you want to invest. Search for a ‘Register Now’ or a ‘New Investor’ link. It will prompt you to fill a simple form with your basic details (Name, Address, Phone number etc), bank details and to register with an Username and Password for transacting online. Then select the scheme, Plan (Direct/Regular) & Option (Growth/Dividend) you wish to invest in. It will ask you to enter your bank account details to set up a monthly debit and to process the redemption proceeds when you redeem. You can choose any date for your monthly SIPs according to your convenience. The first SIP will be after a minimum gap of 30 days. Finally you will have to upload a self attested scanned copy of your bank cheque book/passbook/statement for verification and make the first installment payment online.
One can start an SIP online in a mutual fund scheme through the following steps:
1. Having the necessary documents: You need some basic documents to start an SIP online – PAN card, Address proof (driving licence/bank statement/utility bill), Passport size photograph and a cheque book. The cheque book will come handy to provide your bank details. Having an Aadhar number is not mandatory but it could simplify the process. The whole procedure can be completed online at home.
2. Becoming KYC compliant: It is mandatory to comply with the Know Your Customer (KYC) requirements for investing in mutual funds. Basic information like name, date of birth, mobile number, address, etc are required. This is a one-time process only & once KYC compliant you can invest in multiple mutual fund schemes with different fund houses. You can become KYC-compliant online using the eKYC channel which can be completed online either through websites of certain fund houses or CAMS /Karvy directly. You should fill in basic information and upload a soft copy of your PAN and address proof to support the details filled in the first step. Finally, a video call will be scheduled to confirm your physical presence. You also have the option to complete the eKYC procedure using your Aadhar number. This will simplify the process as it pre-populates the form with your basic information and eliminates the need of a video call. However, it imposes a statutory investment limit of Rs. 50,000/annum/fund house.
3. Start the SIP online: Once you are KYC compliant, you can visit the website of the fund house you want to invest. Search for a ‘Register Now’ or a ‘New Investor’ link. It will prompt you to fill a simple form with your basic details (Name, Address, Phone number etc), bank details and to register with an Username and Password for transacting online. Then select the scheme, Plan (Direct/Regular) & Option (Growth/Dividend) you wish to invest in. It will ask you to enter your bank account details to set up a monthly debit and to process the redemption proceeds when you redeem. You can choose any date for your monthly SIPs according to your convenience. The first SIP will be after a minimum gap of 30 days. Finally you will have to upload a self attested scanned copy of your bank cheque book/passbook/statement for verification and make the first installment payment online.
Sabyasachi Paul has been associated with equity research and advisory on equity markets in India for over 9 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata.He also manages a portfolio on the online platform Kristal. Find link to the strategy named ‘The Tortoise’