SIPSystematic Investment Plan, commonly referred to as an SIP is a mode of investing in mutual funds. SIP is simple where you can invest a certain predetermined amount of money in a Mutual Fund over a period of time. The investment frequency is usually weekly, monthly or quarterly. In SIP, a fixed amount is deducted from your savings account periodically and invested in a specified mutual fund that you choose to invest in.

You can avoid one time investment (where you make a onetime payment of lump sum) by investing in SIP where you can invest small amounts at fixed intervals. SIP earns better during market lows whereas one time investment earns better during market highs. Systematic Investment Plans can also protect investments from potential market crash thus making it one of the most disciplined and safest investing facility in mutual funds.

There are lot of benefits in investing SIP.

  • Disciplined investment – in SIPs you are not timing the market and avoids the volatility in it.
  • Low initial investment – SIPs are lighter on the wallet. You can start with very much lower initial investments as compared to other investment schemes.
  • SIPs also lowers the average cost as it works in bull as well as in bear market.



Complete your Know Your Customer (KYC)

All mutual fund investments including SIP mandate KYC documentation and a net banking account. The first step to invest in mutual funds is to become KYC-compliant. The Know Your Client (KYC) is done to ensure that you understand each and every risks and rewards of investing in mutual funds. You can get your KYC done either online or offline. You should have Aadhar card, your PAN number, photographs etc. for completing KYC. Mutual funds also insist on an In Person Verification (IPV) before completing your KYC.  You are ready to invest once you have done your KYC.


Select a right Systematic Investment Plan

This is a most critical step in selecting the right mutual fund to SIP. You should chose SIP according to your financial goals. Selecting your SIP based on your income and expenditure and the amount you are willing to invest really benefits you in a long run.


Set your SIP details

The next thing is to fix your Systematic Investment Plan frequency and amount which is purely based on your personal priorities. There are different SIP Frequencies are daily, monthly, quarterly or half-yearly. And you can start with an initial amount as low as 500 per month.

Then you have to submit the Common Application Form. After around one month you complete this process, you are ready to invest.




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