Supposedly you start a monthly SIP, it means that each month on a particular date, a fixed sum from your bank account is debited and credited to the fund for unit creation. Having made the necessary choice, you have basically linked your bank account to the investment account which would seamlessly transfer funds from your bank account to the fund in which you have selected to invest through SIP. You could also select a particular date for SIP from the available options. When selecting the SIP way to invest, you have the choice of opting for an investment frequency any date, monthly, quarterly etc. With a valid KYC, you could invest by filling up a physical application form or online through the asset management company (AMC) or other platforms as per your convenience in the fund that you wish to invest. KYC involves submission of requisite documents, which include bank account details, PAN Card and identity proof. To start investing in a mutual fund through SIP, you need to be know your customer (KYC) compliant. The transfer of money from one’s bank account to the fund the allotment of units based on the unit price, which is known as the net asset value (NAV) of the fund on the day the money is credited into the fund and so on. The flexibility to invest a sum as small as INR 500 a month makes SIP not just affordable, it also provides many first time mutual fund investors with the option to experience the way mutual fund investing works. What makes SIP so popular is the ease and convenience it offers, enabling small investments over the long run which has the potential to create wealth for investors. This regular investing could become a habit, if you include mutual fund investing as part of your monthly household budget, which you manage with your regular monthly income. A disciplined approach to investing, especially in mutual funds has several possible benefits, especially in the long run. SIP is nothing but a smart investing tool to invest in mutual funds. So, you could invest in a fund of your choice across frequencies such as monthly, quarterly, weekly, daily or any other periodicity that you are comfortable with. The simple structure of an SIP lets you invest a fixed sum in various mutual funds periodically. And such is the popularity of SIPs that even seasoned investors consider it to be an investment and not a tool to invest in mutual funds. Over the past decade or so, SIP has become synonymous with mutual fund investing. Similarly, in the mutual fund investing space, the prominence of Systematic Investment Plan or SIP is no different. Such is the draw for EMIs that many goods and services are no longer sold at their price, but EMI. The banking and lending segment within the financial services industry introduced the concept of equated monthly instalments or EMIs, which has revolutionized retail lending over the past two decades. Such practices get curated, discussed, debated and often adopted in several allied industries as well. Every industry once matures during its life cycle, it gains acceptance and comes up with certain practices that becomes common phenomena.
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