How to set up SIP investments in mutual funds, stocks, recurring deposits

The most popular route of systematic investment is in a mutual fund. The investor needs to fill up a mutual fund investment form along with KYC form and supporting KYC documents. Investment details such as scheme name, option, etc.

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Demat account holders can set up stock SIPs with their brokers using their broking platforms.
To inculcate the saving and investing habit, it makes sense to set aside small amounts regularly. This allows investors to manage their regular expenses while simultaneously creating a good investment corpus over a period of time.

To make systematic investments, investors may choose from a varied bouquet of products.

Mutual fund SIP

The most popular way is setting up a systematic investment plan in a mutual fund. The investor needs to fill up a mutual fund investment form along with KYC form and supporting KYC documents.

Investment details such as scheme name, option (dividend/growth), amount of instalment, SIP period, SIP frequency (daily/fortnightly/monthly/quarterly) and SIP date must be indicated in the form. Bank auto debit NACH (National Automated Clearing House) mandate needs to be provided along with a cancelled cheque.

Stock SIP
Demat account holders can set up stock SIPs with their brokers using their broking platforms. Investments can be made in a pre-defined theme or basket of stocks on a regular basis, or in stocks chosen by the investor, according to the monthly amount instruction set up by the investor. This can be done using the online platform or mobile applications of brokers. The stock SIP date, frequency, amount of investment in stocks, allocation to different shares needs to be indicated while setting up stock SIP.

Recurring deposit
The easiest way to set aside extra funds in the savings bank account is by setting up a recurring deposit or a sweep-in instruction. This is an instruction to transfer surplus funds lying in the savings bank account to a recurring deposit account or separate fixed deposits. These instructions can be set up either by visiting the branch or by using Netbanking.

Points to note
  • Investors nowadays have the option to invest in corporate deposits using a monthly investment option.
  • One can also make systematic investments by setting up systematic transfer plan (STP) in an existing mutual fund investment.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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