What is SIP?
As the name suggests, a systematic investment plan is a systematic, organised plan that debits money out of your account at regular intervals of time. You can invest in mutual funds by fund houses or even directly as per your choice. As an investor, you have a chance whether investing in a lump sum or through SIP. However, in a lump sum, you would be investing thousands of rupees in one go, and in SIP, you would be investing Rs 500 per month.
How Can You Start a SIP Online?
SIP’s allow you to invest a small amount of money over a regular period by buying units of mutual funds. This helps you in being financially independent and also teaches you financial discipline.
To start your SIP online, follow these simple steps:
Step 1: Decide whether you want to buy mutual funds with your bank/fund house or start yourself.
Step 2: Complete your KYC documentation.
To invest in mutual funds, you must complete your Know Your Customer formalities and get your paperwork sorted.
For your paperwork and documentation, you need- PAN card, Aadhar Card, proof of address. Passport size photo, Cheque book for bank details.
Step 3: Choose the mutual fund of your choice.
Step 4: Register for SIP online.
Now that you have decided on the mutual fund you want to invest in, visit the fund house’s website offering you the mutual fund of your choice.
Register a new account and click on the application form. Fill in your basic details, create an ID and password, and start investing!
Step 5: Select the right SIP.
SIP differs with your choice of income and expenditure. If your goal is to buy a car, go for the dream vacation or save for your marriage, your investment choices will differ accordingly. Use a SIP mutual fund calculator or SIP app for assessing your monthly investment.
What is the Minimum Amount to Start a SIP Online?
SIP’s are a popular way of investment among your peers as you can start with as low as Rs 500 and increase to whatever your capabilities are. However, to understand your financial goals and aspirations, it would be best to use a SIP calculator or SIP app to help you identify your goal amount and how many years it will take to reach your aim.
SIP minimum is the investment amount you need to invest in a Mutual fund every month. You can start your Systematic investment plan as low as Rs 500. However, they differ with the types and choices of mutual funds you plan to diversify in.
Why Invest through SIP?
Systematic Investment Plans guide you and keep you on track with your monthly budget and investment. So whether your goal is to buy a car with the money you save or get your children married, having investment plans to cash on later is very necessary. SIP helps you do that. Hence, even if the market is down, your investment plan remains unless you plan on cashing on it then and there only. SIP automatically invests your money in your choice of scheme without you debiting and putting money into our account and worrying whether your investment has taken place for this month or not.
What are the Benefits of Investing through SIP?
- It is systematically planned to ease your tensions.
You wouldn’t have to worry about monthly investments. SIP helps in maximising returns with its compounding power and earning higher returns over a long period.
- It requires a low initial investment.
You can invest in mutual funds as low as Rs 500 and affordably invest your funds each month.
- It offers online convenience.
Investing in SIP online as well as offline is one of the most convenient ways of investing. You get an extensive market to choose from right at your fingertips.
One of the most common mistakes investors tend to make is halting their investment because the market is down. However, you can do the exact opposite – buy more at a low price! Don’t stop your SIP just because the markets are low, but rather stick as you are here for the long haul. Regular investment and diversification to your SIP is the key to bagging higher returns on mutual funds when you plan on cashing them.
If you are confused about what your monthly investment is, use a SIP mutual fund calculator. If you want to start your investment plan from the comfort of your home, simply use a SIP app to invest in SIP online.