New to SIP Investments? Don’t know how to start a sip? Don’t worry. This article will help you understand how to start your SIP investment. SIP is an investment mode in Mutual Funds where people invest small amounts at regular intervals. However, for people who are new to SIP investments, should know how to start a SIP. So, let us understand how to start a SIP investment, some of the best performing SIP, concept of SIP online, how to buy SIP online, and so on.
As mentioned earlier, SIP or Systematic Investment plan is an investment mode in Mutual Funds wherein; people invest small amounts at regular intervals in the schemes. SIP is considered to be one of the beauties of Mutual Fund as it helps individuals to achieve their goals on time with small investment amounts. Hence, it is also referred to as goal-based planning. People opt for SIP mode of investment to attain various goals such as purchasing a house, purchasing a vehicle, planning for higher education, and so on. People can start Investing money with as low as INR 500. SIP ensures an individual’s current budget doesn’t get hampered while planning for future goals. In addition, in this system, the investment is spread over time which helps individuals to earn more. However, one of the important questions that still need to be answered is How to Start a SIP? which is answered in the following section.
mutual fund calculator also known as sip calculator helps people to assess their SIP amount to attain their objectives. They can also see how their SIP investment grows over a timeframe in a virtual environment. Some of the input data that needs to be entered in the Mutual Fund calculator include your Income, current savings amount, expected returns on the investment, and so on.
Fund NAV Net Assets (Cr) Min SIP Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2021 (%) PGIM India Midcap Opportunities Fund Growth ₹44.67
₹5,169 1,000 13.8 6 12.6 40.6 19.2 63.8 Kotak Small Cap Fund Growth ₹165.057
₹7,080 1,000 8.7 3 11.1 36.7 18 70.9 Nippon India Small Cap Fund Growth ₹87.7909
₹18,358 100 10.2 5.5 15.2 35.7 18.1 74.3 ICICI Prudential Technology Fund Growth ₹138.95
₹8,508 100 0.6 -10.4 -6.9 33.5 27.5 75.7 Aditya Birla Sun Life Digital India Fund Growth ₹120.12
₹2,939 100 2 -9.4 -6.8 32.5 26.2 70.5 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 17 Aug 22
SIP funds having AUM/Net Assets above
500 Crore. Sorted on
Last 3 Year Return.
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The process of starting a SIP is quite simple. So, let us look at the steps that describe the procedure of starting a SIP.
The first step in SIP always starts with the determining of the objectives. Before doing any investment people need to define their objective of the investment. This will help people to analyze what kind of scheme to be chosen, what should be the tenure of investment, the expected returns on investment, and so on. For example, if your objective is to pursue your Master’s education after 2 years then, you should choose to invest in Debt fund. Therefore, determining objective becomes important.
Determining the tenure of investment is also important similar to determining the objectives. Determining the tenure helps to assess the amount of savings that need to be done. For instance, if in a short tenure you need a considerable amount then; your investment also should be high and vice versa.
This is an important activity that an individual should do before investing in Mutual Funds. Individuals should be KYC compliant before investing in Mutual Funds. It is a one-time exercise. Individuals who are done with the KYC compliance procedure can invest in any scheme of various Mutual Fund companies. This KYC compliance process can be done through eKYC that is, online mode or through offline mode.
This is the next step in the SIP investment process. In this step, you need to choose the schemes in which you are planning to invest. In most situations, SIP is referred in the context of Equity Funds. Therefore, before investing in any funds, people need to understand the previous track record of the scheme, whether the scheme suits your requirements, whether the risk-appetite matches your scheme’s requirements or not. In addition, people should check the credentials of the fund manager managing the scheme along with the Mutual Fund Company’s reputation.
People can invest in SIP either through Mutual Fund distributors and other intermediaries or directly through the fund house. However, it is always better to invest through the distributors as they offer a number of schemes of different fund house under one roof which is not possible in case of investing directly through the company.
Determining the investment amount is crucial in case of SIP investment. People while investing in Mutual Fund should decide this amount as the same will be put in the scheme for a given period. To decide the investment amount, people can make use of SIP calculator that helps to understand how much amount is required to attain their objectives. In addition, this step will also ensure that people do not face any financial crunch for their current expenses. Along with the amount, it is also important to select the investment date. This will help people to ensure that amount is deducted on the right date and develop a disciplined savings habit.
For an investment to be successful; just investing your money is not enough. People need to continuously monitor their investments. They need to check whether their funds is giving them the required results or not. People should also rebalance their portfolio on a timely Basis for their investment to be more effective. Monitoring and rebalancing the investment will enable people to earn more.
With the increasing advancements in technology, people are able to carry out a lot of transactions through online mode. Similarly, it is possible for people to carry out SIP online. People can do an online SIP either through the fund house directly or through a Mutual Fund distributor. As mentioned earlier, the advantage of doing SIP through a distributor is people can find a number of schemes of various companies under one roof.
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Thus, from the above pointer, we can conclude that it is easy to start a SIP investment. However, people should be careful while choosing the scheme and understand the scheme’s functionalities completely so that they can earn maximum returns and ensure that their money is in safe hands.
A: If your SIPs are performing well, you can consider investing in Top-Up SIPs. These SIPs allow you to increase your investments at regular intervals. In this way, you can invest in the high performing funds and get better returns.
A: In a flexible SIP, you can increase or decrease the cash flow as per your desire. In other words, when you want, you can increase your investment, and when you require, you can decrease your investment. All you need to remember is that you will have to make certain investments at regular intervals.
A: As the name suggests, a perpetual SIP is one that does not have an end to the mandate date. You can end a perpetual SIP after one, three, or five years. In other words, you can invest and withdraw from the investment as per your requirements.
A: Yes, SIPs are KYC compliant because these come under Mutual Funds. You will have to submit your KYC documents to the Bank or the financial institution through whom you are carrying out the SIP investments. This is a one-time compliance procedure.
A: When you invest in SIPs, it is essential first to evaluate the amount of money you want to invest. The next thing that you must determine is the performance of the SIPs. After that, select the SIPs that meet your requirements based on investment and returns and start investing.
A: To invest in SIPs, you will need a copy of your PAN Card, an address proof such as your Aadhar card or passport, and bank account details.