How to start investing in SIP

What is the best and safest way to invest in stock markets. Well, undoubtedly systematic investment plan is the best instrument. Systematic investment plan is commonly known as SIP, it gives you an opportunity to invest in shares indirectly and thus minimizing the risks of direct investment in shares. SIPs are offered by all mutual funds and once you subscribe sips, experts of mutual funds invest your money in various debt and equity instruments in a manner that with minimum possible risk you get reasonable returns on your investment. Simply put, in SIPs you gain when market zooms, but don't lose much in case of a crash.

How to subscribe SIPs?

You have the option of subscribing it yourself online or you can ask a broker to do it for you. You can even download a form fill it and then deposit it at the nearest office of your chosen mutual fund. For many mutual funds a company called CAMs handles all the paperwork, so you can even visit a CAMs office near you.

Applying SIP: Yourself vs Broker

Now, a look at the advantage of not going the broker way. If you do all the paperwork yourself and go for direct plans then you will not have to pay commission. The commission in case of brokers is small but over a long period it leads to substantial outgo from your returns.

Documents needed for SIP

You may like to know the documents needed for SIP. When you apply for an SIP, you would need copy of Aadhar card for address and id proof plus copy of PAN is mandatory. That is, you must have a pan if you want to subscribe SIP. Since amount fixed by you will be directly debited from your account so you are required to submit a check for the first instalment in case you are applying offline. This gives your bank details to the mutual fund for future auto debit facility.

Number of subscribers in SIP

How many family members can apply a single SIP you may be thinking. you can hold it solely or jointly with others. All holders are required to sign the form and submit PAN and Aadhar details. In case of minors, guardian details are required. In case you want to withdraw money then it will go to the account from which investments were being debited.

Key facts to remember

Here's something very important that you need to know while subscribing a SIP. While applying for the SIP always mention a nominee, this will ensure hassle-free withdrawal or transfer of SIP in name of nominee in case the primary holder suffers untimely death.