SIP mutual fund India is the most convenient way to invest in Mutual Funds across India. It’s easy to set up an SIP for investment – just choose a fund, decide SIP investment amount, SIP duration and frequency and a standby instruction to bank to SIP deduction amount.
Looks cumbersome ! It’s one time set up process works on an automated mode.
Systematic Investment Plan or SIP is a method of disciplined regular investment in ULIP or Mutual Funds India. All AMC, insurance companies and financial institution provide SIP facility i.e. SIP investment fund.
The SIP investment, if continued for long time, may give high inflation adjusted returns.
Table of Contents
What is SIP – Systematic Investment Plan?
Systematic Investment Plan, popularly known as SIP, allows people to invest in small / big denominations on a monthly/quarterly/yearly basis in mutual fund.
In other words, SIP is a smart and efficient way to invest in mutual fund on monthly basis. ( other modes such as daily/ weekly/ yearly etc are also available)
Mutual Fund SIP-Systematic Investment Plan II Step By Step Guide On How To Start A Mutual Fund SIP
The key features of SIP Plans in India
| Feature | Details |
| Small Amount Investment | One can start a mutual fund SIP with just Rs. 500 per month.Some fund houses even allow minimum SIP amount of Rs 100 ( daily/weekly SIP) |
| Flexible Frequency | Different payment modes can be chosen.Such as daily/weekly/ monthly/quarterly/ Half yearly/yearly |
| Diversification | It allows diverse investment across various asset classes.StocksBondsGoldIT Money Market InstrumentsExchange Traded Funds (ETFs)Other assets |
| Flexibility to choose | Investment Tenure ( Duration)Investment amountInvestment Scheme ( equity/ Debt/ Hybrid/ Money market etc)Investment Option ( growth/ IDCW/ SWP/ STP) |
| Top Up/ Step up Facility | You are always welcome to invest more in existing or new scheme eitherLump sumSIP – step up |
| Rupee cost averaging | Benefits of purchasing at various prices. purchasing price is averaged out |
| Transparency and Regular Monitoring | Daily NAV is publishedMonitoring through Mobile applicationRegular notification through mail and SMSWebsite loginMyCamsKfinkartMFCentral.com |
| Automatic Investment | SIP investment plans allows you to automate your investment processOnly initial set up required – it can be given by a standing instruction with bank or mutual fund company |
| Power of compounding | SIP investment multiplies your money with the power of compounding. Longer the time higher is the value of money. Read more |
| Wealth Accumulation | It helps investors to accumulate Sizeable wealth through systematic investment. |
| No Penalty | No penalty for not paying the SIP amount due.( only your bank may charge penalty, in case of bounce 🙂 |
| Tax benefit | ELSS mutual fund category tax deduction U/S 80C.LTCG above 1 lac is taxed @10% ( Equity MF )STCG – 15% ( Equity)Gain from Debt MF is taxed at the slab rate. |
How to Choose a SIP in India?
Before investing in a SIP plan, the following important aspects should be kept in mind:
Set up a Goal First- Every ULIP and SIP investment strategy has a specific aim in mind. You can select the investment option for a fund based on your needs and goals.
Learn How To Set Financial Goals SMARTLY
Investment Duration- When making investments through an SIP plan, you should maintain a reference point of at least five years and monitor how the fund does overall. You may also choose less or greater than five years.
Choose Investment Amounts – Choose your investment amount on the basis of future requirements and present paying capacity. In case you can’t shell out high sum at the time- you can opt for step up SIP or periodic lump sum investment.
Why Should You Opt For Goal Based Investment Planning?
Fund House Performance – You can estimate how successfully the fund managers will be able to handle the market lows and highs without making you feel the effects based on the reputation and performance of the fund house of your SIP plan.
Compare Fund with Peers and benchmark– Before shortlisting any fund, it is necessary to check fund performance and compare it with peers.
Rs.500 Cr Asset under Management– When selecting the finest SIP investment plan’s fund portfolio, beginners should use the Rs. 500 Cr. asset size as a benchmark.
Select the Right Plan – As there is a wide range of SIP plans available in the market, select the right plan by checking the past performance of the funds.
Diversify Your Portfolio -Do not put all your eggs in one basket. Even if you are investing as small as Rs. 5000 on a monthly basis, invest in 2-3 investment categories such as large cap, multi cap, hybrid funds, small cap or other categories.
Periodically Review Your Investments -It is wise to Review SIP plan investment strategy periodically and make any Changes if needed to align with your changing financial goals.
Asset management Companies In India
One can start SIP in almost in all the funds of all AMCs. There are 44 registered AMCs in India. Top 15 are given here ( alphabetical order).
- Aditya Birla Sunlife Mutual Fund
- Axis Mutual Fund
- Bandhan Mutual Fund
- Canara Robeco Mutual Fund
- DSP BlackRock Mutual Fund
- HDFC Mutual fund
- HSBC Mutual Fund
- ICICI Prudential Mutual Fund
- Invesco Mutual fund
- Kotak Mutual fund
- Mirae Asset Mutual fund
- Nippon India Mutual fund
- SBI Mutual fund
- Tata Mutual fund
- UTI Mutual fund
Documents required for SIP investments
you will need to submit certain documents to complete the investment process for a SIP in a mutual fund scheme
| Particulars | Documents |
| KYC documents ( first time investors) | Self attested copy of PAN card Photo ( passport/ Stamp size) |
| Bank Account Details | Account Number Branch Name Branch Address MICR codeI FSC code |
| Address Proof ( any One) ( first time investors) | Self attested copy of address Proof such as Aadhar card Voter ID Card Passport utility bill Municipal tax receipt |
Benefits of SIP
Easy and comfortable investment option
- SIP investments are easy to start via online or offline mode anyone can invest in SIP mutual funds.
- No investment amount -you can start investing with a minimum amount of rupees 500 on monthly basis.There is no upper limit to invest in mutual funds via SIP or lumpsum.
- Enjoy power of compounding benefits- if invested for a long period of time one can enjoy power of compounding of SIP plan. This results in a larger investment return or better Corpus at the end of investment duration.
- Discipline includes the habit of discipline systematic investment plan helps to and concave the habit of discipline investment people can invest topics amount of money periodically at a specific interval of time.
- I liquidity Mutual funds are highly liquid in nature and its withdrawal procedure is quite simple 10 a ship investment can be used for meeting any kind of emergency so your sip Corpus can be used as a emergency purpose also
- diversification- via SIP investment one can invest in a diversified portfolio of stocks or bonds.It also helps to reduce your risk exposure.
- Higher return- mutual fund SIP plans have a better potential to provide higher returns then any other kind of traditional investment options such as recurring deposits NSC etc.
- Low management fee- Since Mutual fund houses work under SEBI guidelines, therefore the fee and expenses are regulated.
- Tax Benefit – the gain from MF is tax efficient in nature. For tax benefit under section 80c one can invest in equity linked saving schemes.
Read more SIP Pros & Cons – What YOU Must Know?
–ICICI Prudential Freedom SIP- Worry Free Retirement Solution
SIP or One time – How should you invest?
There is no replacement of one time or SIP with one another. Both options have their pros and cons.
To benefit from mutual fund appreciation, one can invest via both options simultaneously. Or otherwise, one can choose the option as per your cash flow.
SIP Or LumpSum – Which Is More Profitable?
| one time investment | Systematic Investment Plan ( SIP) |
| You need to make lump sum payment | SIP refers to Specified periodic investment ( Monthly/ quarterly/ yearly ) |
| Earns better returns in the Bull phase market. | SIP, purchase cost is averaged out. May Earns better returns in a fluctuating market. |
| One may lose money in case of market fluctuation. | Because of rupee cost averaging, SIP investment helps to deal with the market-variations |
