Topic 1: What Are Some Of The Operational Aspects Of SIP?
SIPs from mutual funds have caught on with investors. Here are some operational aspects which investors need to know while investing in a SIP.
1.What is SIP?
A SIP (systematic investment plan) is a specific amount, invested for a continuous period at regular intervals, generally on a monthly basis. It allows the investor to buy units of the scheme he/she decides at a pre-decided frequency and the investor decides the amount and the mutual fund schemes to invest in. It helps investors take part in the stock market, without trying to time it, also bringing discipline to your investments.
2.When Can You Start A SIP?
All open end mutual funds allow investors to route their investments via SIP. You can fill the application form along with the SIP NACH mandate & submit it to the point of acceptance. It generally takes 21-30 days for the banks to register your SIP mandate & start it. Some of the fund houses allow you to choose any day of the month for the SIP, while others have a specific days like 1st, 7th, 10th, etc on which you can run your SIPs.
3.What Should be SIPs tenure?
Most fund houses stipulate a minimum time frame of 6 months for the SIP, or can opt for tenure of 3 years or 5 years. Investors have the choice of opting for the perpetual option, which means the SIP will continue till the investor gives an instruction to the fund house to close it. Financial planners suggest investors link SIPs to their goals & run a SIP for that a long a period. For example, if you are building a corpus for your child’s education which is 15 years away, stay invested for that much time. They suggest you can review it once every six months.
4.Can I increase/reduce my existing SIP amount?
An investor can increase his SIP amount, but that is equivalent to the new transaction and hence he will have to fill in a separate NACH mandate. For example, an investor running Rs.5000 SIP in xyz equity fund can add Rs.2000 to the same scheme by filling up the form. However, if he wants to reduce his SIP amount he has to cancel his existing SIP by filling the SIP stop form & then fill up a fresh application form with SIP mandate for the new SIP amount of his choice. There is no fee/penalty levied by the fund house for starting or stopping any SIP.
5.Can I Add Lump Sum To My SIP?
You can add a lump sum amount to the same scheme in which you are running the SIP. So, if you wish to add Rs.1 lakh to the scheme in which you are running the SIP, you can do so by filling the additional purchase form. The SIP continues to run as it is.
1.What is SIP?
A SIP (systematic investment plan) is a specific amount, invested for a continuous period at regular intervals, generally on a monthly basis. It allows the investor to buy units of the scheme he/she decides at a pre-decided frequency and the investor decides the amount and the mutual fund schemes to invest in. It helps investors take part in the stock market, without trying to time it, also bringing discipline to your investments.
2.When Can You Start A SIP?
All open end mutual funds allow investors to route their investments via SIP. You can fill the application form along with the SIP NACH mandate & submit it to the point of acceptance. It generally takes 21-30 days for the banks to register your SIP mandate & start it. Some of the fund houses allow you to choose any day of the month for the SIP, while others have a specific days like 1st, 7th, 10th, etc on which you can run your SIPs.
3.What Should be SIPs tenure?
Most fund houses stipulate a minimum time frame of 6 months for the SIP, or can opt for tenure of 3 years or 5 years. Investors have the choice of opting for the perpetual option, which means the SIP will continue till the investor gives an instruction to the fund house to close it. Financial planners suggest investors link SIPs to their goals & run a SIP for that a long a period. For example, if you are building a corpus for your child’s education which is 15 years away, stay invested for that much time. They suggest you can review it once every six months.
4.Can I increase/reduce my existing SIP amount?
An investor can increase his SIP amount, but that is equivalent to the new transaction and hence he will have to fill in a separate NACH mandate. For example, an investor running Rs.5000 SIP in xyz equity fund can add Rs.2000 to the same scheme by filling up the form. However, if he wants to reduce his SIP amount he has to cancel his existing SIP by filling the SIP stop form & then fill up a fresh application form with SIP mandate for the new SIP amount of his choice. There is no fee/penalty levied by the fund house for starting or stopping any SIP.
5.Can I Add Lump Sum To My SIP?
You can add a lump sum amount to the same scheme in which you are running the SIP. So, if you wish to add Rs.1 lakh to the scheme in which you are running the SIP, you can do so by filling the additional purchase form. The SIP continues to run as it is.