What is SIP and how to start investing in SIP?

how to start investing in SIP

Do you know what is SIP? Have you ever heard about the same anywhere? If not, you just ran into the right place! Here you can grasp every information about SIP as well as how exactly can you begin investing in SIP.

SIP refers to the Systematic Investment Plan. It is technically one of the methods to invest in mutual funds.

Under the Systematic Investment Plan, an investor selects a mutual fund scheme & invest a certain amount at some fixed intervals. In simpler words, SIP is investing in a single scheme with small installments at intervals (instead of a large price at once).

How Does the Systematic Investment Plan work?

The best example to make you understand about the functioning of SIP is a piggy bank. Yes, a piggy bank!!! A kid ‘deposits’ certain money at certain intervals & with time, the amount of the piggy bank will build up to a decent amount.

In the same way, SIP deposits a fixed amount at fixed intervals of time & permits the amount to multiply over time. But unlike a piggy bank, SIPs not only keep your money but also invest your money into some profitable businesses & at the end give you a share of the earnings out of it. Plus, the reinvested amount keeps increasing with every periodic investment that means returns on the investments will also grow.

How to Start Investing in SIP?

Mutual funds investing through Systematic Investment Plan online is easier, faster, and even more effective than any traditional way.

The online SIP investment process does not need a lot of paper works or constant visits to an office for his signatures.

You can easily register with their phone number & e-mail ID and provide digital copies of required proofs online that will allow you to create a secure account. After creating one, you can further select an ideal fund.

To get started, you should meet the following eligibility criteria for investing in Systematic Investment Plans in India:

  • You should be an Indian Resident, Non-Resident Indian (NRI), or Person of Indian Origin (PIO) who lives abroad based on full repatriation.
  • You should be over the age of 18.
  • You should have a bank account with the requisite funds.
  • You should know that the installment amount of SIP will be quickly available even before the investment date.

You should also own the required documents for investing in SIPs in India:

1) Proof of identity– Submit a copy of any one of the following documents as your ID proof:

  • PAN Card
  • Passport
  • Driver’s License
  • Voter’s ID

2) Proof of address– Submit a copy of any one of the following documents as your address proof:

  • PAN Card
  • Driver’s License
  • Voter’s ID
  • Rental/Purchase Agreement

So, let us tell you that there isn’t an ideal time to start investing in SIPs. You can start Investments under SIP at any time with zero or minimal risk.

The right time to invest in SIP is when you have found an excellent mutual fund scheme that can fulfill all your needs!!

Investing as soon as possible in SIPs has always proven to bring out the best results!!!

Leave a Reply

Your email address will not be published. Required fields are marked *