How to start SIP in mutual funds?


If one wants to register SIP, then, online SIP registration is convenient and easy. One must decide how much to invest via SIPs before choosing a mutual fund scheme. SIPs allow investing in small sums at regular intervals.

SIP in mutual funds stands for Systematic Investment Plan. To start a systematic investment plan (SIP), one needs to complete the KYC formalities. One needs to complete the KYC form for SIP registration and requires documents such as PAN card, address proof, passport size photograph and cheque book. After the completion of the registration form, the fund house has sent a confirmation and then it is ready to start investing.

mutual funds

Why choose a mutual fund?

As the mutual fund is managed by professionals and this makes it more risk-free. The money managers have real-time entrance to necessary share market information. The mutual fund also offers transparency to investors. One can trust mutual fund to operate in a systematic manner. The mutual fund also provides ease of investment. A mutual fund is simple and convenient to invest. In this modern time, the value of time is very much. The mutual fund also saves time on the transaction from additional paperwork. The mutual fund also gives liquidity to investors.

Variety in a mutual fund:

A mutual fund offers a wide range of options to investors. There is a different range of sectors and industries in a mutual fund. There are different types of funds which are focused on different bonds. They focus on blue-chip companies, technology stock, or a mix of stocks and bonds. In a mutual fund, one can easily go for the avenue where he can get a high or good return on moderate risk.  Investment in a mutual fund is very easy. A mutual fund provides both offline and online opportunity. As per the choice, one can easily choose any one mode.

One needs to fill the physical form with required documents in an offline mode whereas, in online mode, one needs to fill the soft copy of the form. In an online mode, investment is done through net banking, or through via and bank account. In an offline mode, the investment is only done through cheque.

The NAV:

In a mutual fund, each shareholder gets NAV. NAV stands for Net Asset Value. NAV is an asset divided by units’ value. Hence as per the investment, investors get the return. With high risk, one get high returns, and with low risk, one gets an average return. Each investor gets a folio number, which works similarly as the account number where one can find the details of the investment. When the company earns a good return, after the deduction of taxes and all the expenses, the return is divided among all the investors as per their units. The only thing which can trouble the shareholder is the amount of risk. Because it is human nature that no one wants to take any type of risk. In a mutual fund, there are different investment options. One needs to choose wisely the options and needs to follow the conditions to get high returns.

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