SIPs (Systematic Investment Plans)

SIP Investment Plans

• Overcome financial constraints with a Systematic Investment Plan (SIP).
• Invest in small amounts at regular intervals tailored to your budget and goals.
• Start your journey towards financial growth today! Start Investing Now!

Key Features of SIP

Here are some features of SIPs:

• Disciplined Investing: SIP allows you to invest a fixed amount regularly, promoting disciplined and consistent investing.


• Rupee Cost Averaging: SIP mitigates the impact of market volatility by buying more units when prices are low and fewer units when prices are high, potentially reducing the average cost per unit over time.


• Compounded Returns: By staying invested for the long term, you can benefit from the power of compounding, which can significantly boost returns over time.


• Pocket Friendly: Investing in a SIP doesn’t have to involve high costs; you can even start with INR 500.


• Professional Management: SIP funds are managed by professional fund managers who conduct research and make investment decisions on your behalf.

Our Offering

Mutual Fund SIP

Mutual Fund (MF) SIPs allow you to invest a designated amount at regular intervals in different types of plans. With features like periodic investing, you can invest over time in a plan of your choice. Let’s look at the key features of a Mutual Funds SIP:

• Convenient Investing
• Goal-Oriented Investing
• Transparent Investing
• Portfolio Diversification
• Expert fund management

Equity SIP

An equity SIP allows investors to put their money systematically into the stocks of their choice. With an equity SIP, you can build a great portfolio over time by investing in stocks of growth-oriented companies to generate high returns. Here are the key features you must be aware of:

• Potential for Higher Returns
• Flexibility in Investment Amounts
• Long-Term Wealth Creation
• Cost Averaging and Risk Mitigation
• Goal-Oriented Investing

MF Tax Saving Schemes (ELSS)

An Equity Linked Savings Scheme (ELSS) is a tax-saving investment scheme that allows investors to reap tax benefits. You can invest in ELSS and earn tax benefits as per Section 80C of the Income Tax Act. You can also claim a tax deduction of up to INR 1.5 lakhs for the amount invested in ELSS. Let’s take a quick glimpse into the key features of this scheme:

• Tax benefits
• Equity exposure
• Dividend income
• Capital appreciation

How to Apply

Axis Direct has made it easier to invest. Here are the key steps that must be followed to apply for a SIP investment plan:

• Gather necessary documents like a PAN card, address proof, passport-size photo, and a chequebook.
• Provide basic information and supporting documents for Know Your Customer (KYC) requirements.
• Visit the website of a Mutual Funds house or registrar.
• Fill in basic information and upload PAN and address proof.
• Schedule a video call for verification or complete eKYC using Aadhaar.
• Register on the fund house's website and choose a username and password.
• Provide bank account details for monthly debits and redemptions.
• Select the desired scheme and choose a convenient monthly SIP date.
• Start investing within 30-40 days.

What is SIP?

Mutual Funds allow investors to invest in a diversified portfolio of securities such as bonds and stocks. However, sometimes the price of Mutual Fund units can be high, making it challenging for investors to invest a significant amount upfront. This is where a systematic investment plan (SIP) comes into play. A SIP allows investors to invest in Mutual Fund schemes periodically, typically on a monthly basis. With SIP, investors contribute a fixed amount regularly, regardless of the current price of Mutual Fund units. SIPs provide the advantage of investing smaller amounts consistently, making it accessible for investors with different budgets. It helps spread the investment over a period, reducing the risk of investing a lump sum amount at once. By investing regularly through SIP, investors can potentially benefit from market fluctuations and generate stable returns over the long term.

Types of SIP

Investing in a SIP scheme with Axis Direct is a no-brainer! Let’s look at different types of SIP schemes so you can make the most of your investments. Here are the most prominent types of SIPs available:

❖ Regular SIP

Investors make consistent contributions throughout the fund mandate. The same amount is invested in a mutual fund scheme quarterly, monthly, or any other frequency the investor decides.

❖ Top-up SIP

A top-up SIP allows investors to increase the amount periodically. SIP investment will start with a small amount but increase over the period at your discretion. The top-up is usually made once a year by the investor. You can increase the investment by a fixed amount or percentage.

❖ Flexible SIP

A flexible SIP allows you to alter the investment amount. You can increase or decrease the SIP investment amount throughout the tenure. A flexible SIP is a perfect option if you want to change your investments based on market conditions and your goals.

❖ Perpetual SIP

SIPs usually come with a fixed tenure. Investors are not allowed to withdraw their returns before the end of the tenure. On the other hand, perpetual SIPs have no fixed tenures. In this case, the SIP continues until the investor instructs the Mutual Fund house or the fund manager to stop the investments.

❖ Trigger SIP

Trigger SIP is a type of systematic investment plan where the investment is triggered based on certain predetermined conditions, such as the stock market performance or the fund's net asset value (NAV).

How Does SIP Work?

Here’s how a SIP investment works -

● Selecting a mutual fund scheme

The first step in starting a SIP is selecting a Mutual Fund scheme to invest in. Take the time to research and choose a scheme that aligns with your investment goals and risk appetite.

● Selecting the investment frequency

Decide on the frequency at which you want to invest in the Mutual Fund scheme. Monthly investments are popular among salaried individuals, but you can choose from weekly, quarterly, semi-annually, or annually based on your preferences.

● Setting up SIP with a mutual fund scheme

Setting up your SIP is a straightforward process once you have chosen a Mutual Fund scheme. If you're a first-time investor, you just need to complete your KYC process and provide your bank details, along with the desired SIP contributions and frequency.

● Automatic debits and unit allotment based on NAV

After setting up the SIP, the predetermined amount will be automatically debited from your registered bank account on the selected date. This process continues based on the frequency you have chosen.

Method of Investment in Best SIP Plan

Have you decided to start SIP investments? Here are some methods to invest in a preferred SIP plan:

➢ Investing with Mutual Funds Companies

You can get in touch with reputed Mutual Fund companies to find the best plan. You can visit their website to learn about their offerings.

➢ Investing with the Help of Financial Institutions

Many financial institutions have partnerships with Mutual Fund companies. They allow you to invest in SIP schemes directly.

➢ Investing with a Digital Platform

A digital investment platform is perfect for investors who like control in their hands. Traders can open an Axis Direct account and browse a wide range of Mutual Funds schemes. Investors will have the flexibility to decide on the SIP amount, tenure, start date, and other features.

Why Invest Through SIP – Key Benefits

The thought of investing directly in financial tools might have crossed your mind. Here’s why SIP Mutual Fund investments are preferred and trusted by most investors:

● Developing a Habit of Investing

SIP allows you to invest a fixed or variable amount in a Mutual Fund scheme at regular intervals. Since you will be investing regularly at frequent intervals, you will develop financial discipline.

● Cost Averaging

SIP schemes work on the principle of rupee cost averaging for enhanced decision-making. Since you make fixed contributions, you will buy more Mutual Fund units when market prices are low. On the other hand, you will buy fewer units when market prices are high with SIPs.

● Receive Compounded Returns

The returns earned via SIP are reinvested into the Mutual Fund scheme. It paves the way for capital appreciation and compounded returns.

● Professional Fund Management

Expert professionals manage SIP investments in Mutual Fund schemes. These fund managers make informed decisions on your behalf, ensuring better returns.

Tax Benefit of Investing in SIP

Many investors choose Mutual Funds SIP plans for tax benefits. Here’s how you can claim tax benefits:

• You can start investing in ELSS (Equity Linked Savings Scheme). It is a Mutual Fund scheme that offers tax deductions as per Section 80C of the Income Tax Act. Individuals can enjoy a tax deduction of up to INR 1.5 lakhs by investing in ELSS.
• SIP investments held for more than a year are considered long-term assets. You can avail of tax deductions on long-term capital gains if your investments are 65% or more in equities.

When to Invest in SIP?

The best time to invest in a Systematic Investment Plan is as early as possible. Time in the market is crucial for long-term wealth creation. However, rather than trying to time the market, adopting a disciplined approach and investing regularly, regardless of market conditions is recommended. Investing in SIP allows you to benefit from rupee cost averaging, where you buy more units when prices are low and fewer units when prices are high. This helps to mitigate the impact of market volatility. The key is to have a long-term investment horizon and stay invested consistently, irrespective of short-term market fluctuations.

SIP Investment for New Investors

Choosing the right investment opportunity can be challenging when you are just starting as a novice investor. Luckily, Axis Direct will guide you throughout your investment journey with its new-age trading platform. SIP investment is an excellent choice for new investors to enter the market gradually and build their investment portfolio. It provides a disciplined and systematic approach to investing, making it easier for beginners to get started. With Systematic Investment Plan, new investors can start with small amounts, eliminating the need for a large initial investment. It also helps in managing risk by spreading investments over a period of time. New investors can gain exposure to various asset classes and Mutual Funds through Systematic Investment Plan, enabling them to diversify their investment holdings and potentially earn attractive returns over the long run.

How to Choose a Best SIP Plan?

Choosing a SIP scheme might be tricky, especially when you are new to the game. Here are some factors to consider when selecting the best SIP plan for you:

• Risk Tolerance: Do not invest more than you can bear in SIPs.
• SIP Type: Complete your research to choose from different SIP types like flexible, perpetual, fixed, or trigger SIPs.
• Historical Fund Performance: Do not forget to analyse the Mutual Fund's past performance before investing in the Systematic Investment Plan.
• Expense Ratio: You must consider the expense ratio before investing in SIP, which is the annual cost of managing it.
• Scheme Documents: Scheme documents of a SIP will help you understand the investment objectives, risks, and other etails.
• Fund Reputation: Check for the popularity and trust among investors regarding a Mutual Fund scheme.

7 Mistakes to Avoid When Investing in SIP

Have you finally decided to invest in SIPs and earn compounded returns? If yes, try avoiding these seven mistakes:

➔ No Research

Do not underestimate the power of research before investing in Systematic Investment Plan. Research allows you to make informed SIP investment decisions.

➔ Compulsive Investing

SIPs are designed to withstand market volatility. There is no need to make compulsive investments due to short-term price swings.

➔ No Financial Objectives

It is crucial to find the reason you are investing in SIP. It can be long-term investments, capital appreciation, dividend income, etc.

➔ Not Monitoring SIPs

Do not forget to monitor the Mutual Fund performance at regular intervals to make informed decisions. Stay updated with the market trends to make better SIP investments.

➔ Stopping SIPs During Market Downturns

Market downturns can be unsettling, but stopping SIPs during these times may result in missed opportunities for accumulating units at lower prices. Stay committed to your investment plan and continue with your SIPs even during market volatility.

➔ Ignoring Scheme Documents

Do not ignore scheme documents before investing in a Systematic Investment Plan. It will allow you to learn more about the Mutual Fund investment terms, objectives and risks.

➔ Not Rebalancing SIP Investments

Financial objectives might change over time. It is essential to review your SIP investments after regular intervals and align them with financial goals.

FAQs

What are the documents required to start a SIP? What is the minimum amount to invest in SIP? Can I invest in SIP for a short duration? What happens if I miss a SIP instalment? What is the power of compounding? Can NRI clients opt in for SIP? What is the lock-in period for SIP? Is SIP better than RD? Is SIP good for the long term? How can I stop my SIP? Can I invest in multiple SIPs? Can I invest in SIP without a bank account? Can I change the SIP investment amount? Can I withdraw my investment before the completion of the SIP tenure? What is the role of a SIP calculator? Is SIP safe or not?