How to invest in SIP?

SIPs or systematic investment plans are a form of investment in mutual funds where you can invest a fixed amount at regular intervals in the fund of your choice. It is similar to a recurring deposit and can be deducted from your account based on your standing instructions to the bank.

SIPs are a popular form of investment for beginners and people who cannot afford to set aside a lump sum to invest in one go. You may start with as little as INR 500 and make it a habit, gradually increasing your investment amount with time.

For people who prefer disciplined and long-term investments, SIPs are the right choice. You also need to worry less about market fluctuations and instant losses when you take this approach. 

Before you start investing in an SIP, you can predetermine the frequency and amount of investment, as well as calculate the expected returns through an SIP calculator. It helps you plan your financial future in a more informed manner.

SIPs have the ability to give steady returns, form an investment habit, and prepare a corpus for your future. But to avail of these benefits, you first need to start investing.

How to Invest in an SIP?

Now that you know what is an SIP, the next step is to find out how to invest in one. You can invest in SIPs either online or offline. Here are a few steps to help you out:

Choose the right mutual fund

The first step is to determine which mutual fund is right for you. For that, you must think about your investment objective and how much risk you’re willing to take. Based on that, choose from the types of mutual funds available. While finalising a fund, check its historical returns, its reputation, and terms and conditions.

Complete the KYC Process

For online investment, this is what you need to do:

Create a new account or log in to your existing account.

Complete the KYC form. It may need your ID proof and other basic details.

Make the payment online to start investing.

To invest offline, through a paper form:

Fill out the application form and KYC form.

Get a cancelled check with an auto-debit form.

Submit these forms to the nearest branch of the bank. You can also opt for bill payment or e-mandate payment modes.

Submit identity proof, such as a PAN card, Aadhaar card, etc. 

Select the Investment Amount and Date

You must choose the amount of money you want to invest and in what intervals you want it to be debited. You can opt for monthly debits, or multiple debits in a month, or one per quarter, and so on.

In this stage, you can also choose the investment tenure. Use the SIP calculator to determine the amount you should invest to achieve your financial goals. Although the calculation isn’t exact, it gives you a rough idea of the investment amount, frequency, and tenure to choose.

Start Investing!

Once you’ve settled on all the details, you can submit the investment form and start your SIP. This can be done through an online Demat account or offline form submission. Choose the platform that works best for you and keep investing periodically to get decent returns after your tenure is over.

Mutual fund investments can be optimised based on your financial stability, investment goals, and life events. To do so, you must know more about SIP investments and learn how to select the right plan for you.