All about starting an SIP in a mutual fund scheme

A systematic investment plan (SIP) in a mutual fund scheme allows one to invest in a disciplined manner. Initiating an SIP requires the investor to choose the scheme, frequency, term, and amount that he wants to invest in each instalment. While first-time investors need to fill the mutual fund application form, along with the SIP enrolment form, the existing investors are required to fill only the latter.

Information: The investors need to furnish information such as SIP commencement date, frequency of investment, investment period, chosen series of dates for the SIP, instalment amount and details of payment.

Mode of payment: Investors can pay either through post-dated cheques, ECS mandate or standing instructions. In case of cheques, the number of leaves should be the same as the instalments. For ECS, investors need to fill up the ECS mandate form and submit it with the application. If the investor holds an account in the same bank as the scheme, a standing instruction can be given to the bank.

Processing: The above documents should be submitted to the AMC office, branch or investor service centre. The AMC usually takes 15-21 working days to process the documents and initiate the SIP.

Points to note

> The dates, frequency and amount have to be chosen from the options provided by the mutual fund.

> The new investors initiating an SIP also need to furnish the KYC acknowledgement in addition to the above documents.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Sunita Abraham, Girija Gadre and Arti Bhargava.