Ashwini Shinde
A Systematic Investment Plan allows you to make easy, consistent and hassle-free investments in the stock market on a regular basis. Once you sign up for a Mutual Fund SIP it enables you to give a standing instruction to your bank to auto debit a fixed, pre-decided amount on a weekly, monthly, quarterly (etc) basis to buy units of mutual fund(s) of your choice. As you invest over a period of time, more units get added into your account, increasing your corpus through the Rupee Cost Averaging.
Now let us delve into the process of investing itself. Once you have decided on the mutual fund(s) that you want to invest in, you need to do the following:
Source: http://www.utimf.com/learningcentre/Pages/all-about-sip.aspx
First and foremost you need to** understand your risk profile**. You can seek assistance from your bank Relationship manager to understand your investment planning and risk profile based on your age, the number of years that you have been working, how many years you are willing to invest and the financial liabilities that you carry.
After assessing your risk profile and carefully choosing the mutual fund(s) of your choice, then you can proceed to filling out two forms: an Application form and an SIP mandate form. While the main application form is required to feed in all the fundamental details like your name, occupation, employment, salary, age, address, nomination etc; the SIP form will require you to fill out all details regarding your Systematic Investment Plan. Most Mutual Funds allow you to choose between monthly and quarterly investment plans, however a few Fund House have also come up with weekly plans.
You will then require to choose the date at which you prefer to have the money debited, either through post-dated cheques or by giving standing instructions to your bank to auto-debit the amount from your account. The date options are given across the month depending on the Fund House that you have chosen, so you can time the investment every month or quarter as per your convenience. Most mutual funds are not flexible in changing the investment date later, so choose it carefully.
The forms can then be submitted either to the Mutual Fund office or the nearest service centre of Registrar & Transfer agent.
After the Systematic Investment Plan comes into effect, the Fund House will regularly send you the account statement updating you on the number of units purchased and the Net Asset Value(NAV) at it has been credited to your account.
So, an SIP Mutual Fund is a simple, non-cumbersome and absolutely feasible option for people from all walks of life, to nurture their money and see it grow and reap rich returns.
The Stock Market is a highly attractive investment option for any professional who is looking to see his money grow manifold. If handled in a smart, patient and calculated manner, equities can help you gain handsome returns. But the fact of the matter is, not everyone has the aptitude for it. Just 2% of the Indian population has invested in equities. The figure speaks for itself. But these apprehensions and worries need not hold you back from making timely, disciplined and consistent investments in the stock market, without worrying about the highs and lows. How?
Well, the answer is *SIP Mutual Funds. *
