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How to Start Online SIP in Mutual Fund


There is something about the name Systematic Investment Plan or its acronym SIP. Its name clearly indicates what it means.

A sip of anything usually means carefully consuming small quantities. In the same fashion, a SIP investment in mutual funds can mean carefully investing in small quantities. You can also SIP in mutual fund at regular intervals.

But, can you SIP in mutual fund easily?

Well, here are Five Steps to Invest Online in SIP:

1. Make Financial Goals

It is of utmost importance to start listing your goals and ranking them based on your priorities. Next, you can start calculating the real value of your goals by taking inflation into account.
For example, if your goal is to take an international trip, say after three years, you would need to calculate the amount of money that you will have to spend if you were to do this now. Plus, you would have to consider and predict the trip cost after three years.
This is important because the value of money keeps changing due to inflation. Also, you might not want to miss your goal’s bullseye by throwing your SIP investment darts in the wrong direction.

2. Form Timelines

After you have calculated the real value of your goals, you must segregate them into short-term, medium-term and long-term goals. This can help you analyse the time your investments have to grow.
Goals like buying a new scooter, building a solid emergency corpus can be your short-term goals.
Your goals of going on an international trip, starting your own business and planning for your dream wedding can come under your medium-term goals. Lastly, building a strong retirement corpus, planning for your child’s higher education can be categorised as your long-term goals.

3. Know your Risk Appetite

Now that you have carefully analysed your goals and their characteristics, it’s time to know about yourself. Your risk appetite can be a necessary factor in determining your SIP investment choices.
Here is how you can estimate your risk appetite. You can either identify the ratio of your goals timelines and goals costs. Or you can recognise your income, expenses, family profile, active loans, previous investments/savings and more.
Each of the mutual funds can be categorised into various risk profiles with the help of the Riskometer. These categories are Low, Moderately Low, Moderate, Moderately High and High Risk. Therefore, it is vital to analyse your own risk appetite before starting a SIP in mutual fund.

4. Calculate with SIP Mutual Fund Calculator:

Once you know your goal timelines and your risk appetite, you can calculate your journey towards your goals with the SIP calculator.
This can help you know how much SIP you need to reach your goals within their timelines. You can modify your SIP amount and period to check the difference in the timelines.
Alternatively, you can also try different timelines and check how much SIP is required for each timeline accordingly.
This can also help you choose a suitable mutual fund for each of your financial goals.

5. Seek Financial Advice
You might have heard this at the end of every mutual fund advertisement on television, “Mutual funds are subject to market risk…”
Seeking financial advice from a certified and seasoned finance professional may help you make better SIP decisions.

Start Your SIP Online

Making things a bit more easy for you, you can now effectively perform the steps mentioned above online. Meaning, you can chart your SIP journey online, hassle-free and in the comfort of your home.

After choosing a fund to invest in, the first step is to complete your eKYC (Know Your Customer). (If you have already competed your eKYC with any mutual fund earlier, you need not repeat the same.)

Visit the mutual fund website and look for the option to complete your eKYC. Here, you can provide your basic information, provide Identity proof i.e. your PAN and address proof, cheque image of the bank from where you want to make investment and a make a video to authenticate yourself After you have completed this process, your KYC is valid for all mutual funds.

Next you must select a fund, your SIP amount and tenure. Once you have done this, you can register your bank mandate for the SIP. This is a kind of authorisation for debiting your account for SIP investments.

Did you see how simple and easy it is to complete your SIP journey and chart it online at your fingertips?

Mutual Fund investments are subject to market risks, read all scheme related documents carefully

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