A Conversation with Systematic Investment Plan (SIP)

Start a SIP | Image Source : pixabay.com

An interesting way of generating money without any effort. This kind of investment plan offers its consumers to invest in a small amount of money on the monthly or quarterly basis which eventually results in returning way better. SIP stands for Systematic Investment Plan.

• Benefits

Several benefits come under this Investment plan:

A. Small Amount of Money:- Investing in Mutual funds through SIP allows investors to start an investment with minimum to Rs 500/Month. Releasing this every month will not be difficult for anyone and also not perturb their monthly budget.

B. Discipline in Investing:- As this requires to pay a definite amount every month with no complexity, makes this a disciplined investment plan.

C. Uncomplicated Investing:- The process is too simple, you just need to set up SIP once, after then, money will automatically deduct from your Bank account.

• How to Start

Total three steps to follow, to begin with, SIP

A. Ready with Documents:- Handful of documents are required to start a SIP. These Basic documents include PAN card, an address Proof and a passport size photograph with chequebook. Adhaar card is not necessary but it makes the process easier.

B. Become a KYC:- KYC stands for know your customer. This is an important step to comply for the SIP process. This is a one time process which required basic details like name, DOB, address, mobile number etc.

C. Start process online:- Once you are ready with above two, last step is to process online through the website.

• Interest Rate

In SIP, the investor needs to invest in a small amount on a regular basis, therefore, the interest is not fixed. It is based on market fluctuations and fund transfer.

• Frequency

There are four frequencies are available and investors can choose from any of these based on their convenience. These are Monthly, Quarterly , Semi-Annually and Annually.