Home >Money >Personal Finance >Systematic Investment Plan: How to start SIP online?

Systematic Investment Plan (SIP) is immensely popular among mutual fund investors for its easy operation. Mutual fund experts believe that SIPs are the best way to invest periodically in the market. Under SIP, a fixed amount is deducted from a specified savings account every month towards a mutual fund chosen by the investors. It comes in handy to people who do not have a large sum of money to put in the lumpsum investment. There are various schemes which allow the investor to start a SIP with as low an amount as 500.

Here are a few easy steps in which you can start a SIP online:

1) To start a SIP you would just need your PAN card, an address proof, a passport size photograph and a cheque book.

2) It is mandatory to comply with the Know your Customer (KYC) requirements for investing in mutual funds.

3) Once your KYC is complete, you can visit the website of the fund house and choose the SIP of your choice.

4) Look for 'Register Now' link to register a new account

5) An application form will pop up in which you need to fill in all the personal details and contact information. Submit the form.

6) Choose a username and password for transacting online.

7) Provide details of the bank account from which the SIP payments will be debited.

8) Just log in with your username and select the scheme you want to invest in.

9) Once the registration is complete and the fund house has sent a confirmation, the investment can start.

10) The SIPs usually start after a gap of 35-40 days.

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Advantages of SIP

  • For those who have just entered the world of investment, SIP is one of the best options to put their money as it mitigates the risk of a potential market crash.
  • SIP is very convenient as it allows investors to put in smaller amounts every month without any hassle. In fact, one can also give Standing Instructions (SI) to the fund house for auto-debit from your bank account.
  • One big benefit of investing in the mutual fund via SIP is that your returns multiply by compounding interest. Which means you earn interest on the principal amount and the interest gained on that amount. Suppose you invest 1000 in a mutual fund at a 10% rate of return. After a year, interest earned would be 100. From the next year, you’ll earn interest on 1,100.

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