How to Open an SIP Account

Systematic Investment Plan or SIP means a method of investing money in mutual funds.

In an SIP, one invests a fixed amount of money in a mutual fund every month. which is automatically deducted from one’s bank account. To know what amount of monthly SIP you need to invest to achieve a certain money goal, one can use SIP account calculator. A Systematic Investment Plan (SIP) calculator is an online financial mechanism that helps to calculate the potential returns on your SIP investments. The online SIP account calculator tells you how much money should be invested every month to for a target corpus.

A systematic investment plan (SIP) means a plan that gives investors the right to make regular, equal payments into a mutual fund of their choice.

To open an SIP account, the investor should hold an investment account with the fund house. She/he needs to complete KYC verification before operating the SIP account. Once the investor has completed the KYC verification, she/he can open her/his SIP account within the investment account by filling up the ‘Start/Initiate an SIP’ form.

Step 1: Collect necessary documents

The following documents are necessary for KYC registration: PAN card, address proof like driving license/bank statement/utility bill, a passport size photograph, and cheque for the bank details.

Step 2: Be KYC compliant

Any AMC website or RTA website which provides KYC facility can validate KYC. The investor also has to complete FATCA formalities by answering certain questions online.

Step 3: Register with the AMC website

After completing the KYC formalities from the website of the fund house (AMC), she/he should click on the ‘Register Now’ or a ‘New Investor’ tab provided on the website; the investor furnishes the PAN number, personal details, nominee details, bank details and answer few FATCA questions. Then a User Id and password is generated for transacting online.

Step 4: Scheme Plan and Investment Amount

The investor chooses the scheme along with the plan and option and decided the SIP amount. Investors can select either regular plans or direct plans and can go for either growth option, IDCW option.

If the investor is certain of the SIP amount that she/he is going to make, then he or she can fill up the investment amount in the given box without using the online SIP calculator.

Step 5: Payment Mode and Date

Once the investor has decided the kind of SIP investment, he/she has to selects date/s and pay the first SIP instalment. The investor decides on the mode of payment; the amount can be auto debited from the investor’s account, net banking or NEFT/ RTGS payment.

Step 6: Submit Transaction

After completing details online, it is submitted to the AMC. The AMC sends acknowledges via email and SMS.

The investor can login to his account to check the status of investments etc.

An active SIP account inculcates a sense of financial discipline over time as you are forced to invest a fixed sum at regular intervals.