If you are new to the world of mutual funds, do not worry, investing in them is easier than you can imagine. By now, you must know that mutual funds are professionally managed funds that invest in multiple assets like equity, debt and other money market instruments in accordance with achieving the scheme’s objective.
A lot of people confuse equity mutual funds with being the only investment option available. What a lot of investors do not know is that mutual funds are further categorized as per their risk profile, asset allocation, investment strategy / objective etc. So depending on your requirements, you can add a mutual fund to your investment portfolio. While financial planning, understanding your risk profile is of utmost importance because it allows you to narrow down to schemes that have a risk profile matching your risk tolerance.
Mutual fund investors have the option of investing in them either through a lumpsum payment or via SIP. In lumpsum, you pay the entire premium of your mutual fund investment at the beginning of the investment cycle. This type of investment is ideal for those who have large capital sitting idle and want to put it to better use. Also, when you invest in lumpsum, you are allotted a large number of mutual fund units as per the fund’s existing net asset value or NAV. This can be good as the market keeps on fluctuating and NAV of a fund can go higher in future, benefiting the investor in turn.
However, if you want to give your investments a systematic approach and want to inculcate the discipline of investing regularly, you can opt for SIP investment. Systematic Investment Plan allows investors to invest a fixed amount every month electronically. You may remain invested in mutual funds via ELSS until the investment objective is met. If you want, you can even invest in SIP online.
So if you have decided to invest in mutual funds via online SIP but don’t know how to do it, here are things to keep in mind.
Keep all your documents ready
Investing in SIP online requires you to have a few basic documents handy like your AADHAR card, your Personal Identification Number or PAN card, permanent address proof like driving license/passport/voter id and a passport size photograph. You will need to scan and make soft copies of these documents and keep it beforehand.
Get your KYC verification done
It is needless to say that before investing in mutual funds, you need to make sure that as an investor, you are KYC compliant. Know your customer or KYC is mandatory for everyone looking to invest in mutual funds and hence you too need to make sure that your KYC is completed. If you want you can get online KYC done. A KYC form consists of necessary information like name, age, address, contact number, nationality, etc. and it is better that you fill this form so you can start investing soon. But remember that eKYC has a statutory investing limit of Rs. 50,000 per annum per AMC and if you want to invest more it’s better to get in-person KYC done.
Start your mutual fund SIP
One your KYC registration is completed you shall receive your y can visit the website of the mutual fund house you want to invest. There should be an option of ‘Register Now’ or a ‘New Investor’ link. It shall redirect you to fill some personal details followed by the option of choosing a username and password for online transactions.
You can now log in and check all your mutual fund investments are decide a fixed amount that you want to invest every month in your desired mutual fund and start a SIP. Isn’t investing in mutual funds via online SIP an easy and straightforward process?