You’ve probably already heard of SIPs, but did you know you can enrol for SIPs online? Here’s all you need to know about iSIPs. Read on!
Systematic Investment Plan is a method of investing in Mutual Funds. A Systematic Investment Plan allows an investor to invest a certain sum of money in a Mutual Fund for a specific period.
A Systematic Investment Plan is very much like a Recurring Deposit in its method of operation. However, where a Recurring Deposit offers low returns, a Systematic Investment Plan is linked to Mutual Funds, and therefore, to market performance. Thus, investing in Mutual Funds through a Systematic Investment Plan offers investors better risk-adjusted returns.
SIP: A Safe Way To Make Mutual Fund Investments
Investing in Mutual Funds through a Systematic Investment Plan is a safe way to invest. Here’s why.
Due to the effect of rupee cost averaging, investments made through a Systematic Investment Plan effectively minimise the effect of the changing prices of Mutual Funds.
With Systematic Investment Plans, an investor can buy a larger number of fund units when the fund price decreases and buy fewer units when the fund price increases. In short, a Systematic Investment Plan allows you to make hassle-free investments regularly. No hassles about price fluctuations. Worried about timing the market? That’s a thing of the past if you are investing in Mutual Funds through Systematic Investment Plans.
Additional Reading: Everyone’s Going The SIP Way!
Want To Get Started With A Systematic Investment Plan?
To begin investing in Mutual Funds through a Systematic Investment Plan, all you need to do is instruct your bank to permit a chosen Mutual Fund to debit a specified amount from your account every month.
This is your monthly investment and this instruction can extend for the duration of the Systematic Investment Plan.
Additional Reading: SIP Investing In Mutual Funds
A New, Easier Method To Invest With iSIP
Investors interested in investing in Mutual Funds through a Systematic Investment Plan now have a much simpler way to do this. They can enrol for Systematic Investment Plans online.
What Is iSIP?
iSIP is a fully paperless, secure method of opening a Systematic Investment Plan for Mutual Fund investments.
What’s Required To Start Investing In iSIP?
An investor choosing to invest in an iSIP must have access to NetBanking. The bank must also be certified to offer investors the online SIP facility.
Additional Reading: Set Your Goals Before Investing In Mutual Funds
Know Your Customer (KYC)
All investors must mandatorily comply with Know Your Customer (KYC) norms. This is a basic precondition of investing in Mutual Funds. An investor must submit the required KYC documents and have them registered with the KYC Registration Agency before commencing an online Systematic Investment Plan.
Online iSIP Form
The investor choosing to invest in an online Systematic Investment Plan (iSIP) can register by filling an online form. The iSIP form is available on the Mutual Fund website.
What Information Is Necessary?
Investors are required to submit their PAN details, bank details, address proof, Systematic Investment Plan scheme details, investment frequency and investment period at the time of registration.
Unique Registration Number (URN)
After submitting all the required information in the online form, a Unique Registration Number (URN) is generated. This number shows up on the screen and is also sent to the investor’s registered e-mail ID. The URN is also sent as an SMS notification to the investor’s registered mobile number.
The investor then needs to provide this Unique Registration Number to proceed further with the registration process. Investors can track the registration status of the online Systematic Investment Plan on the Mutual Fund website.
Add Mutual Fund As New Biller
To get this done, the investor is required to log in to their bank’s NetBanking site to include the Mutual Fund.
This addition should be done within a period of 10 days after the investor’s Unique Registration Number (URN) is generated. In case this is not done within 10 days, it will be deactivated.
After the Mutual Fund is added to the bank account, the bank will verify and activate the biller.
How To Add Mutual Fund As A Biller For iSIP?
Here are the steps you need to follow:
- Login to your net banking account
- Add Mutual Fund as a new biller
- Choose biller option under payments
- Note that you need to add biller within 10 days of generation of URN
- Once the URN is entered, the bank will verify the details
- SIP investor can set an auto-debit option in the bank account and due date for the payment
How To Invest Through iSIP?
Here are the steps you need to follow:
- Visit the fund house or AMC
- Register for online iSIP form
- Enter all details such as PAN card, bank details
- Enter details about the scheme like the name of the scheme, SIP amount and frequency
- Fill nomination and broker details (if any)
- Once the form is submitted, a URN is generated and sent to the registered email ID
Auto-Debit Option
The investor can choose the auto-debit facility at the time of registering the Mutual Fund with the bank. With the auto-debit facility activated, the Systematic Investment Plan’s investment amount is automatically debited from the investor’s account and transferred to the Mutual Fund on the due date specified.
Remember to keep the Unique Registration Number (URN) safely as this will be required for future reference and for any claims pertaining to the online Systematic Investment Plan.
Additional Reading: Benefit Yourself By Investing Through SIPs
So, are you prepared to go paperless with an online Systematic Investment Plan?