How to Start Investing in SIP Mutual Funds

With the start of the new financial year, investors would be keen to start with new investments. And one of the smartest ways of investing in mutual funds is through Systematic Investment Plan (SIP). Here is a guide to investing in SIP.

With the increased awareness for investments, a shift in interest have been observed for mutual funds investment. However, investors are still reluctant with mutual fund investment because of issues like insufficient lump sum money, not aware when to enter and exit the market, reluctant to take risks and naive to mutual funds. The only solution to these problems is to start investing in SIP.

SIP is an easy route to start investments where one can invest as low as Rs 500 per month and also does not require to time the market. By investing in open-ended funds one can easily withdraw the money whenever required. With Systematic investment plan, one can even invest online, with no paperwork. Here is an outline of how to start investing in SIP online.

Complete your Know Your Customer (KYC) requirements:

Irrespective of whether you choose SIP or otherwise, to start your mutual funds investment the first mandatory step is to fill your KYC form. Most of the fund houses allow you to upload the documents online through eKYC portal that is available on their respective websites.

This is a one-time job where you need to click the eKYC link of your selected fund house. For instance, in case of ICICI Bank, you need to follow 6 easy steps to register for starting your mutual fund investment.

Though the exact steps for eKYC is different for every fund house, but the basic steps are more or less similar.

Upload your documents

You will require a few basic documents like PAN card, address proof (utility bill, Aadhaar card, passport, driving licence, etc), passport size photograph, and your bank details. You need to upload the scanned copy of these documents along with your address proof.

In Person Verification

Few cases, you will need In Person Verification (IPV) where your selected fund house will require you to schedule an appointment for a video call. This process will be done to confirm your identity through a webcam. During the video call, you will have to show your PAN card and address proof.

To make this option easier or to overcome this process, you can add your Aadhaar card number that is linked to your mobile number. Enter the One-Time Password sent to your mobile number and your details will automatically be fetched from Aadhaar details. In case the person needs to invest more than Rs <50,000> then PAN card details would be mandatory.

Register and select an SIP

After your KYC formalities are over, you will have to register for SIP through your preferred fund house. You will have to create User ID and Password for your login, and then fill the form with your personal details. You would also require to fill your bank account details from which your SIP amount will be deducted.

After you are done with your registration, you can choose the SIP that fits according to your financial goals.

Decide on the amount that you need to invest, tenure of your investment, and the type of fund that you wish to invest whether equity funds, debt funds or balanced funds. Before you choose your fund, it is necessary to study the market trends and the past performance of the fund in which you wish to invest.

choose your fund

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