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A systematic investment plan is known as one of the simplest yet intelligent mode of investing in mutual fund schemes.  With the simple and disciplined method of investing, SIP investment is emerging as one of the popular choices of investment for most of the investors. According to market experts, systematic investment online is considered as one of the best ways to periodically in the market.

Even though SIP investment is very popular among mutual fund investors, there is a number of individuals who are still confused about SIP and don’t really know how it works. As SIP full form is a systematic investment plan, investment in SIP is very simple. In the SIP plan, the investors are required to invest a pre-determined amount at a specific interval of time in the mutual fund scheme of their own choice. The investors can choose to invest in SIP plan in quarterly, monthly, weekly and daily basis.

According to the market experts, the investors should invest in equity mutual fund only through SIP as it maximizes the returns and helps the investors to average their purchase cost. One of the major benefits of investing in SIP is that it initiates the habit of disciplined investment among the investors so that they can accumulate wealth over a long-term period and achieve their financial goals of life.

The process of SIP investment online is very simple and hassle-free. Further, in this article, we will elaborately discuss step by step guide to investing in SIP online.

Step1- Get all the Necessary Documents

Primarily the investors should keep handy the following documents such as PAN card, address proof (utility bill/driving license/bank statement) passport size photograph, addhar card, and cheque book while investing in SIP plan.  The investors will be required to submit all these important documents while investing in systematic investment online.

Step 2- Become KYC complaint

In order to invest in mutual fund through the process of SIP, it is important to provide certain details like date of birth, name of the investor, mobile number, address proof, etc. in order to get the LYC done. The investors are required to go through this process only once. Once the KYC is done, the investors can invest in multiple MF scheme with different fund houses.

The investors can use the eKYC channel to become KYC-complaint online. There are many different fund houses that provide the facility of eKYC. In order to complete the KYC process, the investors should thoroughly fill all the personal details along and upload it along with the soft copy of PAN and Address proof. One can also complete the process of eKYC by using aadhar number.

Step3- Start your SIP Online

Once know your customer (KYC) process is successfully completed the investors are required to the website of mutual fund house they wish to invest in and look for ‘new investor ‘or ‘register’ link. After filling all the basic details, the investors can create their own username and password for the online transactions. Besides this, the individual will also require to enter the bank details so that monthly debit can set up and to process the proceeds of redemption when they want to redeem.

The investors can choose any date from the monthly SIPs according to their own convenience. The systematic investment plan will start within the time period of 30 – 40 days.

So, these are the simple step by step process to invest in SIP online.  However, there are certain things that should be kept in mind while investing in SIP.

Things to Keep in Mind While Investing in SIP

The process of systematic investment online is very simple and hassle-free. The investors are just required to keep the below-mentioned points in mind while making the investment.

Set Investment Goal

The most important thing to consider while investing in SIP is that all SIP MF investment has a fixed purpose and goal. So, as per one’s own financial goal and requirement, the investors can choose to invest in the fund option of their own choice.

Select the Right Plan

As there are extensive systematic investment plans available in the market, thus it is very important to choose the right plan for investment by checking the past performance of the mutual fund scheme. Also,  as per their financial goals and requirements, the investors can choose the fund option to invest in.

Understand the Risk Appetite and Investment Objective

Prior investing in MF SIP it is important to know one’s own risk appetite. In most cases, higher the financial obligations and age of the investors are, lower the risk tolerance is. However, one can gain higher returns on investment by increasing the risk appetite. Along with the proper understanding of the risk appetite, it is also important to know the investment objective i.e. why one wants to invest.  It is important to keep in mind that the major goal of investment should be to fulfill the short-term and long-term financial objectives of the life such as marriage, purchasing a car, buying a house, kids education, savings for retirement, etc.  By keeping a proper understanding of the investment objective one can easily get the right portfolio mix of debt and equities.

Decide the Duration of SIP

Investing in a mutual fund scheme through SIP is one of the most convenient and best ways to fulfill the financial objective of life.  By determining the SIP investment amount to meet the future financial goals, the investors can decide the duration of SIP. However, in order to gain maximum return on investment and accumulate wealth in a  long-term, it is suggested to stay invested in SIP for a long-term period.

Wrapping it Up!

If we talk about smart investment planning, then mutual fund SIP investment is considered as one of the best choices of investment in term of creating corpus and long term planning. Even though investing through SIP in a mutual fund is considered very simple, it is important to keep the above-mentioned points in mind and follow the steps properly while investing in SIP.

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