A mutual fund systematic investment plan (SIP) is an investing strategy that allows one to invest at monthly or quarterly intervals to build wealth over the long term while taking advantage of compounding growth. Investors do not require a Demat account to invest in a mutual fund SIP. They can simply download the fund’s app or visit the website to subscribe and invest in an SIP, subject to providing necessary details such as PAN and Aadhaar card, nominee information, etc.

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Mutual funds are low-risk and low-cost investments instruments compared to stocks and other assets. Mutual fund SIPs can weather the market volatility to provide long-term growth. No wonder MFs have become one of the most popular investment vehicles among the masses.

However, before investing in an SIP, one must set short—and long-term financial goals, such as marriage, children, buying a home, children’s education, retirement, emergency fund, etc. You can decide on the portfolio allocation depending on your goals, age, income, and investment horizon. For instance, you can step up on equity schemes for long-term and debt funds or a conservative investment strategy for short-term goals.

In addition, knowing your risk appetite is vital. For instance, how much risk can you take on your investments relative to your goals? What are your regular expenses, and how much loss can you bear without jeopardising your budget or finances?

If you have decided to buy an SIP plan, use the SIP calculator to know the projected return. You must input the investment amount and time horizon in the calculator to know the expected returns. This calculator will show the monthly contributions and returns over time, allowing you to plan your investments and retirement effectively.

Alternatively, you can consult a certified financial planner to help you find the best funds to invest in, set goals and the amount you will need to make over time to reach your financial goals.

How To Invest In An SIP?

Step 1: Choose a Fund

Choosing the right investment plan is crucial. Different plans have different features and benefits. Before selecting a plan, consider your risk tolerance, the fund’s costs, etc.

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Step 2: Registration

You must subscribe to the scheme via the fund’s app or website to register for an SIP plan.

Alternatively, you can submit the form via post offices and banks. Signing up for a SIP is free and straightforward.

Step 3: Provide Necessary Documents

Ensure you have all necessary documents, including photo identity, address proof, Aadhar card, PAN card, and bank account details. Also, comply with know-your-customer (KYC) norms.

Step 4: Investment

Determine the amount you want to invest, considering your financial needs and income. Choose a date that suits your convenience, as multiple dates can be selected for different SIPs.