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Systematic Investment Plan (SIP) is a mode of investment that allows you to invest a certain sum in Mutual Fund, at predetermined dates, through the auto-debit system from your bank account. The units are the purchased at the prevailing Net Asset Value (NAV).
SIP investment helps in building healthy fiscal discipline. This mode of investment helps you to accumulate wealth and achieve your financial life goals through a planned and well-defined approach.
When you invest in Mutual Funds through SIP, you can benefit from ‘Rupee cost averaging’. This means you buy a larger number of units when markets are low and a smaller number of units when markets are high. This averages out your total cost.
However, before you start your SIP online, it is important to conduct a thorough research about the best SIP plans in India and to be informed about factors like SIP returns, type, tenure, etc.
ICICI Bank Limited is an “AMFI - Registered Mutual Fund Distributor”
Benefits of Investing in SIP (Systematic Investment Plan)
Building Financial Discipline
Securing long-term financial gains
Flexibility
Systematic Investment Plan (SIP) is an investment tool that promotes financial discipline by encouraging individuals to invest regularly. With SIP, investors commit to investing a fixed amount at regular intervals, helping them build a habit of saving and investing over time.
SIPs help secure long-term financial gains by providing the benefit of rupee-cost averaging and mitigating market volatility risk. Investors can accumulate wealth over time by investing a fixed amount regularly, leading to potential long-term financial gains.
SIP offers flexibility to investors by allowing them to choose the investment amount, frequency, and duration based on their financial goals. Investors can also modify or pause their SIP investments, providing them with the flexibility to adapt to changing circumstances.
How to invest in SIP?
Investing in a Systematic Investment Plan (SIP) is a smart way to venture into Mutual Funds (MFs) and gradually build wealth. Signing up for an SIP is a simple and free process. Many banks offer convenient plans for automatic deposits into MFs. Starting your SIP journey not only leads to financial discipline but also allows you to benefit from the power of compounding over time. Here is how you can start investing in an SIP:
Keep the following documents handy
- ID proof
- PAN Card
- Address proof
- Valid bank account details
- Passport or driving licence copy
Ensuring compliance with the latest KYC norms set by the government is essential for a hassle-free investment process.
Complete your KYC
Completing KYC requirements is important for any financial investment. It can be completed at authorised banks, post offices issuing prepaid cards or online. The application form will require personal details and a declaration of your investment intentions.
Register for an SIP
Choose the right plan
Determine the investment amount
Decide the monthly or weekly investment amount based on your financial goals and liquidity needs. This step ensures a disciplined and consistent approach to wealth creation
Pick the SIP date
Select a convenient date for your SIP investments. Enjoy the flexibility to choose multiple dates for various SIPs within a month, customising the plan to fit your financial calendar.
Submit your form
Once you have selected your MF company and SIP, initiate the SIP by submitting the form. It can be done online through your Demat Account or offline through your bank.
How to submit the form online?
If you are a new investor, create a new account or log in with your credentials if you are an existing user
Fill out the KYC details
Complete the online payment.
How to submit the form offline?
Fill out the application form along with the KYC details
Fill out the Auto Debit Form (ADF) and submit a cancelled cheque
Submit all the required identity proofs such as utility bills, address proof, etc. at any ICICI Bank Branch.
Start your SIP today and take a significant step towards achieving your financial goals!
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Popular SIP FAQs
An SIP allows investors to invest a fixed amount at regular intervals, usually monthly. The amount is invested in a Mutual Fund scheme of the investor's choice. Over time, the investment generates returns based on the fund's performance. SIPs enable investors to benefit from compounding.
The minimum amount to invest in an SIP may vary depending on the Mutual Fund. Typically, the minimum amount can range from as low as Rs 100 to Rs 500 per month.
A Top-up SIP is an option provided by Mutual Fund companies to increase the amount of monthly investment in an existing SIP. It allows investors to increase their investment amount by a fixed amount or a percentage of the original SIP amount. This feature enables investors to increase their investment amount as their income and savings grow, helping them to achieve their financial goals faster.
Investing in SIP Mutual Funds provides several benefits, including disciplined investing, rupee cost averaging, power of compounding, flexibility and diversification. SIPs allow investors to start with a small amount, reduce the impact of market volatility and beat inflation. It has relatively higher liquidity as compared to other financial instruments. So, it generates higher returns in the long run.
If you are confused about when is the right time to invest in SIP, it is when:
- You want to start with a small amount
SIP opens the door to investing with Rs 500 monthly, making it accessible even for those with limited budgets. This affordability ensures that financial growth is within reach for a broader audience.
- When you're being cautious while investing in Mutual Funds
It's great for those curious about Mutual Funds (MFs). By investing small amounts regularly, you can assess if they suit your financial goals without a big initial commitment.
- When you prefer lower-risk
If you're risk-averse, SIP is a safer bet. It spreads the risk over time, which is especially beneficial when looking for a lower-risk investment with an extended timeframe.
