SIP (Systematic Investment Plan) is an investment plan for individuals to invest periodically over time. SIP has gained immense popularity amongst various types of mutual funds in India. A systematic investment plan helps investors assemble wealth through systematic investment and acquire returns, even if they start investing with a small amount. Investing a fixed amount monthly or quarterly into a mutual fund decreases the risk of market volatility. The most effective way of mutual fund investment is starting a SIP plan. Let’s check out the process of starting a SIP for a mutual fund.
Necessary documents for SIP
Starting a SIP requires necessary documents to be submitted to the fund house. You would need documents of your PAN card, ID proof, address proof, passport size photograph and bank details. Also, you need to complete your KYC formalities set by the government. You can get your KYC done from any of the authorized banks or post offices in India. you can apply for online KYC too. You have to submit an application form attached with personal details, address proof, Aadhar card, and PAN card. You can start investing in mutual funds after becoming KYC compliant.
Register for a SIP
The next step is to register for a Systematic Investment Plan. You have to register with a fund house of your preference. For registration, visit the official website of the fund house, find a registration link and click on it, a registration form will appear, simply fill in your details and information. After that, you have to create a user ID and password to perform future transactions online. Add your bank account details from which the payments will be debited for Systematic Investment Plan. Most fund houses will send you a confirmation of registration so that you can start investing.
Choose the right SIP
The vital step is to choose the right SIP that will provide benefits. Research the plan well to get all the information. Ask yourself, how many units you want to invest in, what are the risk factors, and what kind of investor you are. Also, select the sum you can afford to invest in the scheme monthly or quarterly. You can use a SIP calculator to check out the amount you have to pay. The plethora of options can be confusing, so take your time to make a decision. If you can handle high-risk tolerance, go for an equity-linked plan. Individuals with a moderate appetite should choose debt or balanced funds. Scrutinize the latest market trends and the previous performance of funds to make the correct choice. Once you make your decision, select a date for your SIP according to your comfort.
A Systematic Investment Plan is the latest way of investing in mutual funds. A fixed sum will be debited from your bank account monthly or quarterly and invested in the SIP scheme. It provides regularity in investments that make the wealth-creation procedure easy and hassle-free for investors. Now you know all the required information about SIP investment, it will be a wise decision if you choose the best sip plans for 1 year. SIP schemes can provide better returns than other schemes of mutual funds.