Every year people start new things and think of investing. Of course, in this New Year you might also be thinking about some investments right? Have you ever come across the term SIP? What do you know about it? Have you ever tried to explore it and invest in it?
By now, if you were thinking how to start sip then you are at the right place. The foremost thing you need to do before beginning an SIP is attaining the: Know Your Customer (KYC) need. KYC is a must have to do investment in mutual funds. You would have to deposit an identity proof, address proof and certainly a photograph. You also have to confirm your physical existence through an In-Person Verification (IPV). Certainly, you can finish all these requirements electronically through eKYC. Most of the fund houses have begun catering this facility through their site. You simply have to tap or click on the platform like ekyc link and have to follow the instructions given therein. Remember the accurate steps for eKYC differ mildly with every specific fund house. However, broadly the structure always stays the same.
The system would first of all prompt you to step in all the personal information in an online form. It will encompass name, date of birth, mobile number, address and so on. Then in the next step, you shall have to upload a scanned copy of your PAN (Permanent Account Number) card coupled with an address proof. Once you have created the account, simply login, pick the mutual fund scheme, pick an SIP date and deposit your request. Congratulations, once you are done with this, you successfully finish the procedure and make your sip account.
Working of sip
Once you decide to invest in the scheme of a mutual fund through SIP, the decided sum is auto-debited from your bank account (you require to give your bank account from where the amount would get deducted). This is the sum that specifically is treated as a mutual fund scheme. A particular number of units based on the Net Asset Value are given to you and that is prevalent on the purchasing date. In case you are not in favour of attaining the sum deducted from your bank account, you can even handover cheque along with the (filled) enrolment form. Also, the mutual fund is going to deposit your cheque on the demanded date and simultaneously, credit the units to account you have coupled with the confirmation.
The earlier you start to invest in SIP the possible growth will get productive. Via SIP, once you invest the (same) amount regularly over time, you incline to get more units when the cost if lower and vice-versa. Hence, the normal cost per unit (or per share) is reduced. Not to forget that SIP ends up in catering reasonable returns in the chosen time.
Thus, once you start SIP you would find it really helpful. And remember if you have any doubts about SIP you can talk to professionals and they might guide you.