As economic insecurity rises, the need for financial planning and investment rises in tandem. The key to investment is to beat inflation consistently and over a long period of time for effective wealth creation. To this end, mutual fund Systematic Investment Plan or SIPs have proved to be a very effective instrument.
The current calendar year of 2024 has witnessed the blooming of the SIP revolution. There has been a nearly three-time jump in MF folios. AMFI data show that the number of folios zoomed from about 7.92 crore in January to 22.08 crore in November. The new year being a few days away, it is an ideal time to launch your investment journey. It is very easy to begin investing in mutual funds. For your benefit, we have listed step by step on what should a beginner do.
How do I start mutual fund SIP
There are two ways of starting your mutual fund SIP (Systematic Investment Plan) journey. One can start an online account to begin investing in mutual fund schemes of your choice. This is a new way. Or, one can take the help of a mutual fund distributor who can get it done where you have to sign a few documents, though the paperwork is minimal.
First, the online process. One can start SIP investments with the following steps.
ONE: Get documents such as PAN card, Aadhaar for address proof (or driving license or electricity bill etc) for KYC at hand.
TWO: The investor has to become KYC compliant. He/she has to provide basic information such as name, date of birth, address, mobile phone number and upload the documents for KYC
THREE: One has to register online with the mutual funds house (also known as AMC or asset management company). The portal will provide an user id and password which will be needed for making transactions etc. There are multiple portals and one has to register with each separately.
FOUR: Before investing, one has to choose a scheme and the amount of money to be invested. The frequency of investment – daily, or weekly or monthly etc – has to be decided and provided too. The date of investment has to be provided too.
FIVE: After all the details have been sent to the AMC, it will acknowledge the new investor through e-mail and sms.
Mutual funds have become a hot favourite investment destination for the Indian middle and lower-middle class. If you are looking for an instrument that can give you inflation-beating returns consistently for wealth creation without the tension usually associated with stock markets, begin mutual fund SIPs (Systematic Investment Plan) in the new year. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
