Step-by-Step Guide to Systematic Investment Plan (SIP)

Step-by-Step Guide to Systematic Investment Plan (SIP)

SIP investment

What is a SIP?

SIP is an abbreviation for Systematic Investment Plan. A SIP plan is a systematic approach in terms of saving money. It is an investment plan that an individual can invest into and get returns from it after the interest rates have appreciated the capital. The money out in by the investors is invested into mutual funds. The investor is able to accrue large sums of money when they receive the returns. It is done so that the money they receive can be put to good use for fulfilling wants or desires after a few years. Many people use it as a money saving scheme to help save money for the future to have a sense of security.

Follow the guide below to invest into SIP

  • Let the company know you as a customer

To invest into a SIP, the first step you need to take is complete the process of KYC. KYC stands for Know Your Customer. This is a process in which the potential SIP investor has to enter certain details and information about them which will be used for the purpose of KYC. The information that they will be asked is their name, address, their birth date, cell phone number and other things which are useful for the purpose. This step is compulsory if you want to invest into a systematic investment plan (SIP). It can be done through KYC registration agencies or KYC websites. There are two ways to do it: either follow the process above or link your Aadhar card to the KYC account. Linking the Aadhar card will help it get all the information from your UIDAI – Unique Identification Authority of India that it requires. The linking will make the process easier as you would not have to enter the information separately.

  • Upload documents so that they can be verified

To invest into systematic investment plan (SIP), the next step that the investor needs to take is upload their documents for the purpose of verification. The investor has to scan each of their documents that are asked and upload them onto the website. They have to do this with their PAN – permanent account number card.

  • Be ready for IPV

Verifications are important to know exactly what one is dealing with. Now, the investor will be verified through a process of video calling. The video call verification process is known as IPV: In – Person Verification. This process is completed online to make it easier. The investor has to select a date which is suitable for them to go through the process and also select a particular time which they are comfortable with. The, the fund company will make the video call, so make sure your web cam or front camera is functioning properly and you have strong internet connection. Keep your PAN card as well as address proof handy as the verification agent might ask you to hold it up during the call.

  • Make account

The next step that the investor has to finish is to make an account for their systematic investment plan (SIP). You have to go to the website of the fund company and click on the registration link that guides you to make a new account.

  • Enter your information

The next step after you make the account is to enter the details about your bank so that your systematic investment plan (SIP) can be started online.Make sure to enter all the details about your bank correctly for a smooth processing.

  • OTP verification

Yes, verification is very important. Now, the investor will receive an OTP – one time password, either on their mobile phone through SMS or their e mail ID that they registered with. Then, the investor has to get the account verified through the OTP that they have received.

  • Log – in

The SIP account has been created. The investor just has to log in into it, now.

  • Start the process

Now that the account has been made, the investor needs to make a few selections regarding to the SIP to make the process kick – started. The selections that have to be made are for the date of the SIP and also the mutual fund scheme that you want to choose for the purpose of investing into the systematic investment plan (SIP).

Investor’s choice and selections

After you have started your SIP account, make sure to do a few more things to make the SIP work well. There are two things, which are as follows:

Pre – determined investments

The investors invest a pre – determined amount as SIP investments into the mutual funds by paying into it at regular intervals. These interval periods can be chosen by the investor themselves. They can be either quarter – yearly, monthly or weekly. The investor carefully assess their potential to invest in accordance with how much they can afford and what the level of their risk appetite is. Then, they select an amount that is suitable to them to invest. The main purpose is to invest money enough so that the returns are significant.

Automated investment debit

When the investor has started with their systematic investment plan (SIP), they have to make payments for the funds they want to invest. Now, there is an option that will allow them to make the investments even in case they forget to do so because of any internal or external environmental distractions. This can happen through a process called auto – debit. The investor can tell their bank to start the process of paying on their behalf into the systematic investment plan (SIP). This eliminates the non – payment of investments and the lapse of the systematic investment plan (SIP). You just have to instruct your bank to do the deed and it will be done. The bank will make the payments during each interval and that to at the prescribed date or before the deadline. You can trust a bank to make payments more than yourself as it’s their job to do so.

Follow the step – by – step guide to systematic investment plan (SIP) to be able to invest properly and smoothly into the plan without any hassles.