Investment vehicle like Systematic Investment Plan [SIP] allows an investor to invest a fixed sum amount regularly in a mutual fund scheme like equity mutual funds.
Through SIP, you can achieve a financial disciple to your life, and it is quite flexible with regards to regular payments which can be on a daily, monthly or yearly basis.
This investment tool has made it possible for even a salaried person to invest in mutual funds in smaller amounts rather lump sum amount, which has a higher risk element. If regular investments are made irrespective of the market conditions, it will give you greater returns in the longer run.
Here is how you can open start a SIP investment online
Arrange for the necessary documents
Documents required for starting a SIP are rather basic. You would need arrange the following documents:
- Address proof [e.g. Aadhaar, passport, voter ID, utility bill, driving licence, etc.]
- Passport-size photograph
- Cheque book details
- PAN card
KYC process
After arranging the documents, visit the website of a bank or NBFC [Non-banking financial institution] that offers the eKYC [electronic KYC] facility and provide your basic information like your name, date of birth and contact details. Upload soft copies of your documents to support the details provided by you.
It is important to mention that using your Aadhaar card can simplify the process. You have to follow the list below:
- Enter your Aadhaar number.
- Enter the one-time password sent on your linked mobile number.
- Details will be filled in automatically.
After completing the KYC [Know Your Customer] process, you can invest in any mutual fund scheme from any bank or NBFC you like. There is no need to do the KYC process again if you approach a different bank.
Register for a SIP
Now concentrate on registering for a SIP in a mutual fund scheme of your choice. How should you go about this?
- Go to the website of the Bank or NBFC that offers the scheme.
- Look for a link to register a new account.
- Click on the link, and you will be taken to a simple application form. You must fill in your basic personal details and contact information in it.
- Give the details of the bank account from which the SIP payments will be debited.
Once the registration is complete at your end, and the bank or NBFC has sent a confirmation, you are ready to start investing.