If you are new to mutual funds and looking for an easy way to invest, a systematic investment plan (SIP) is one of the prudent choices. SIPs permit you to invest a fixed amount on periodic basis in a preferred mutual fund scheme. This makes investing both easy as well as affordable.
Here is a stepwise guide for you to start your SIP journey, along with how an online SIP calculator can help you plan out your investments in an effective way.
- Gather your documents
Before beginning, make sure you gather all the required documents. These documents are your PAN card, identity proof, address proof, bank account details and in some scenarios, a passport-size photo and a cancelled cheque. Keeping these documents handy streamlines the process and allows you to finish the Know Your Customer (KYC) authentication with zero delays.
- Complete your KYC
KYC compliance is a must before investing in mutual funds. You can complete your KYC either via online mode or through the fund house’s website or offline at a branch or with an authorised distributor. You are required to submit personal details and upload scanned copies of your documents. Once your KYC is authenticated, you can invest in any mutual fund of your choice.
Zero in on the correct mutual fund
Select a mutual fund depending on your goals, risk appetite level and investment time frame.
• Equity funds are a well-suited option for long-term wealth creation that comes with higher risk.
• Debt funds offer stability and are preferred for meeting short-term financial goals.
Use an online SIP calculator to figure out how much you must invest month-on-month via the SIP mode to attain your financial targets. To compute the potential future corpus, ensure to input the preferred investment figure, anticipated return rate and investment time frame into the calculator.
- Register for an SIP
Once you have selected a mutual fund scheme, you can register for an SIP through the fund house’s website, a mutual fund platform, a distributor, or a financial advisor. During registration, you will need to:
- Enter your bank details for auto-debit
- Select your investment amount
- Choose the SIP start date
You can begin investing with as little as ₹500 per month, making it highly accessible for new investors.
- Fill out your form and start investing
Complete the SIP registration form online or offline, whichever suits you best.
- For online submission, log into your account, enter the necessary details, and make the first SIP payment.
- For offline submission, you can drop the completed form along with required documents at a bank.
Once activated, your chosen SIP amount will be automatically debited from your bank account and invested in the selected fund on your chosen date every month.
Conclusion
Starting an SIP in mutual funds is a simple and systematic way to build long-term wealth. By following these five steps, you can begin your investment journey with clarity and confidence.
Do not forget to use an SIP calculator to track your progress and fine-tune your investment strategy over time. Regular reviews and minor adjustments based on market conditions and personal goals can further enhance the efficiency of your SIP portfolio.
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