Why Is It Compulsory To Pay SIP Every Month?

A mutual fund plan may accept regular, small investments through the Systematic Investment Plan, or SIP. With SIP, a predetermined amount is automatically withheld from the investor’s bank account and regularly invested in the mutual fund of their preference.

What Is SIP?

You can invest a small amount regularly in your favourite mutual fund scheme with a systematic investment plan or SIP. Turning on a SIP automatically takes a certain sum out of your bank account each month and is spent in the mutual fund of your choice.

With a SIP, your investment is spread out over time instead of a flat sum. As a result, you don’t need a sizable sum of money to begin investing in mutual funds through SIPs. When you invest through a SIP, you are compelled to set money aside regularly, which will help you develop fiscal stability in the long run.

Can You Skip Your SIP Payments?

If you are having difficulties paying your bills, there is a better method to skip a few SIP instalments. If you anticipate a future cash need, you can halt your SIP by writing a SIP Stop Notice to the mutual fund firm at least 30 days in advance. The request can be made offline or online using an application form.

You can start a new SIP whenever you feel secure financially once you are ready to resume your SIP payment.

How Do SIPs Work?

SIP or Systematic Investment Plan is the most common method of investing in a mutual fund. You can stagger your investment with a SIP by making small, regular investments. You can set your SIP frequency weekly, quarterly, or biannually depending on your comfort level.

Every SIP instalment results in the purchase of new fund units at the current NAV. The cost of purchasing fund units levels out over time and ends on the lower end. When you maintain your SIP during a market correction, you buy more fund units while buying fewer units during a market correction.

As a result, you profit from both declining and rising markets. The practice is known as rupee cost averaging. Whenever the markets have reached their top, you can benefit from realising bigger capital gains because your purchase cost will have been averaged out and will likely be lower than expected.

How To Start SIP In Mutual Funds?

Set financial objectives: Setting a purpose for the investment is the first step in the SIP investment process. Every mutual fund is created with a particular goal in mind. Therefore, understanding the objectives one hopes to accomplish with the investment is crucial. The ideal mutual fund can be selected once the purpose has been determined.

Complete the KYC procedure: Every investor needs KYC because SEBI requires it, and without it, no one can begin their investment adventure. Primary documents like identity evidence, address proof, and pictures must be supplied for the KYC procedure; you can do this online by going to the fund house’s website and selecting the e-KYC option.

Selecting the SIP: After choosing a specific plan, the SIP option is selected by filling out the relevant information, such as the investment tenure, frequency, and overall investment amount.


Even after you request to terminate your SIP, the mutual fund scheme’s previous SIP investments will stay invested. The scheme’s current investment will continue to generate rewards. SIP termination does not imply scheme withdrawal. You will need to submit a Redemption Request to redeem your investments.

Redemption requests can be submitted online with a few clicks of the mouse or manually using a Redemption Request Form.

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