When it comes to investment, Systematic Investment Plan (SIP) has become a buzz word and investment in mutual funds through SIP has become extremely popular among mutual fund investors. To invest in mutual fund SIPs, there are two way – either you take help of a mutual fund distributor or do it yourself online. However, a large number of investors may still be confused about how to open SIP account online.
Today with the advent of digital platforms, investors may find it easy to open a SIP account online compared to the traditional way of investing by filling up an application form. In fact, you can open SIP account online from the comfort of your home. Please note that to open SIP online, KYC is a mandatory requirement. To be KYC compliant, your address proof, and PAN Card etc. is a mandatory requirement. Here are the steps that one need to follow -
As mentioned above, the investor need a PAN card, an address proof in the form of driving license/bank statement/utility bill, a jpg or PNG image of passport size photograph, and cheque for the bank details.
Once the documents are ready, the investor can get the KYC done through any AMC website or RTA website which provides e-KYC facility. KYC done online is referred as eKYC. For doing e-KYC, the investor needs to provide basic information like name, date of birth, mobile number, address, and upload a copy of address proof, PAN, identity proof and passport size photograph image online. A video call is required for IPV (In-Person-Verification) to confirm the details. Along with KYC, the investor also has to fulfill the FATCA formalities by answering the required questions online.
As the investor is done with two steps – Organizing the necessary documents and e-KYC, he has to follow the steps mentioned below to start a mutual fund SIP online.
If the investor has done e-KYC from the website of the fund house (AMC) in which he wants to invest, he should click on the 'Register Now' or a 'New Investor' tab given on the fund house website, where the investor need to provide PAN number, personal details, nominee details, bank details and answer few FATCA questions. Post this a User Id and password is generated for transacting online.
This again is an important step, where the investor has to specify the SIP amount and choose the scheme name. The investor also has to decide the scheme plan and option. Generally investors can go with either regular plans or direct plans and can opt either for growth option, dividend payout option or dividend reinvestment option. Please note that investor cannot opt for dividend reinvestment option if investing in ELSS scheme.
Most of the AMCs provide an online SIP calculator to help the investor to know the amount to make a decision based on the financial goal, and how much to invest daily/ monthly/weekly etc. to accumulate for the desired goal corpus. Investor can invest accordingly by knowing the amount with the help of this online tool.
If the investor has already decided or know the exact SIP amount then he or she can straightaway fill up the investment amount in the box provided without taking the help of the calculator.
After the investor has decided whether to make a daily, weekly, monthly or quarterly SIP investment, he/she has to selects date/s and to make the payments for the first SIP installment. It is important to choose this date wisely. Now the investor has to select the mode of payment - There are few options as the amount can be auto debited from the investor's account through registration of OTM (one time mandate), Net banking or NEFT/ RTGS payment.
Once the investor fills in all the details online, it is submitted to the AMC. The AMC sends an acknowledgement through email and SMS. If the transaction is submitted within the cut-off timing of the respective scheme, the units are allotted the same day and SOA (Statement of Account) is emailed to the investor.
Generally the next SIP date can be a date of investor’s choice after 15 – 21 days (depending upon the AMC) from the first investment date. The AMCs reminds the investor through SMS and email prior to the next SIP installment due date.
In case of any issues in setting up the SIP, usually the service team of the AMC writes to the investor or call and helps in sorting out the issue.
The investor can also visit the AMC website and login to check the status of investments etc.
Please note that if you are already mutual fund KYC compliant, you can visit the AMC website, provide your PAN number when asked, the AMC will verify your KYC status and you can follow the steps for online SIP account opening.
Now that you know how to open SIP account online why not opt for the simple way to start a SIP in mutual funds ?
For information on one-time KYC (Know Your Customer) process, Registered Mutual Funds and procedure to lodge a complaint in case of any grievance Click here! Information on KYC, Registered Intermediaries and Grievance Redressal
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.