Investing in mutual funds through a Systematic Investment Plan (SIP) is a popular and convenient way to grow your wealth With the rise of technology, investing in SIPs has become easier and more accessible than ever before In this article, we will guide you through the process of starting an online SIP investment
Step 1: Set monetary objectives
Start by making a list of your objectives and ranking them according to your top priority After that, you can begin to factor in inflation to determine the true value of your ambitions Calculate the amount of money you would have to spend if you were to take the trip now, for instance, if your objective is to travel abroad in, say, three years The trip's cost after three years would also need to be taken into account and predicted
This is crucial because inflation constantly alters the value of money. Also, you might not want to aim your SIP investment darts in the wrong place in case you miss the bullseye on your target
Step 2: Form Schedules
You must categorise your goals into short-term, medium-term, and long-term ones after determining their actual values. This might aid in your analysis of the growth potential of your investments
Your short-term objectives could include things like getting a new scooter or creating a strong emergency fund.
Your medium-term aspirations could include taking a vacation abroad, creating your own company, and organising the wedding of your dreams Last but not least, your long-term goals can include creating a sizeable retirement fund and making arrangements for your child's further education.
Step 3: Identify your risk tolerance
It's time to learn more about yourself now that you have thoroughly examined your goals and their qualities. Your investing selections for your SIP may be influenced by your risk tolerance
Here's how to gauge your risk tolerance You can either calculate the proportion of your goals' expenditures to timeframes. Alternately, you can identify your earnings, expenses, family profile, open debts, prior investments, and savings
The Riskometer can be used to classify each mutual fund into different risk profiles Low, Moderately Low, Moderate, Moderately High, and High Risk are the different classifications So, before beginning an online SIP investment in a mutual fund, it is crucial to evaluate your individual risk tolerance
Step 4: Choose a mutual fund
The first step in starting an online SIP investment with Globe Capital is to choose the mutual fund that you want to invest in You should consider your investment goals, risk appetite, and investment horizon while choosing a mutual fund There are many online platforms that can help you choose the right mutual fund based on your investment needs.
You can also consult with a financial advisor to get expert advice on selecting the right mutual fund
Step 5: Create an investment account
Once you have selected a mutual fund, you need to create an investment account with the asset management company (AMC) or any online investment platform that offers mutual funds You will need to provide your personal details, such as your name, address, and PAN card details, to create an investment account It is essential to ensure that the details you provide are accurate, as any discrepancies could cause problems in the future.
Step 6: Complete the KYC process
To invest in mutual funds, you need to complete the Know Your Customer (KYC) process, which is mandatory as per the guidelines of the Securities and Exchange Board of India
(SEBI) You can complete the KYC process online by uploading your documents such as PAN card, Aadhaar card, and a passport-sized photograph. The process is straightforward and can be completed in a few minutes
Step 7: Link your bank account
Once you have completed the KYC process, you need to link your bank account to your investment account This is important as it will enable you to invest in mutual funds and also receive the returns directly in your bank account. You can link your bank account online by providing your bank details, including your account number and IFSC code
Step 8: Choose the SIP frequency and amount
After you have linked your bank account, you can choose the frequency and amount of your online SIP investment The frequency of your SIP can be monthly, bi-monthly, quarterly, or any other frequency offered by the mutual fund. You can also choose the amount you want to invest in each SIP installment It is essential to choose an amount that you can afford to invest regularly without disrupting your monthly budget
Step 9: Submit your investment request
Once you have selected the frequency and amount of your online SIP investment, you need to submit your investment request. You can do this online by logging into your investment account and selecting the mutual fund you want to invest in You will need to provide the SIP start date and the number of installments you want to invest in After submitting your investment request, the SIP amount will be automatically deducted from your bank account on the selected date
Step 10: Monitor your SIP investment
Investing in mutual funds through SIPs is a long-term investment strategy It is essential to monitor your investment regularly and make any necessary adjustments to your investment portfolio based on your investment goals and market conditions. You can track the performance of your mutual fund investment online by logging into your investment account
In conclusion, starting an online SIP investment is a straightforward and convenient process. By following these simple steps, you can start investing in mutual funds and grow your wealth over the long term Remember to choose the right mutual fund based on your investment needs, complete the KYC process, link your bank account, choose the SIP frequency and amount, and monitor your investment regularly to achieve your investment goals.