5 Replies to “What are the exact procedures one totally ignorant person should follow to invest in SIP?”

  1. There aren’t too many procedures. Open an ICICI direct or Kotak account. And have a standing instruction from the account for the same. Although SIP (Systematic Investment Plan) is applicable to any mutual fund, it would be easier to manage for you if you do it this way.

    SIP averages out all the markets up and down move. Read about the concept called “Dollar Cost Averaging”. This will help you definitely make money in the long run in the equity markets

    Incase you have an active interest in understanding and following stock markets in india, check this page out http://tradingforprofit.blogspot.com

  2. You could follow the steps outlined below:

    1. Get yourself a PAN (Permanent Account No.), if you don’t have one. PAN no is mandatory for any financial/investment transaction in India, including Mutual Fund investments. Usually one receives the PAN card within 15-21 days of application. See the details for PAN Applications, here https://tin.tin.nsdl.com/pan/index.html

    2. Open a trading account with ICICIDirect or an Investment account with Citibank. If you already have a bank account with either bank, opening the investment or trading account is fairly simple. You will need to fill up some additional forms, and you can be ready to roll withing 7-10 days

    3. Next you need to do some research, about the best funds to invest in. Fortunately there is a very good, unbiased and independent research site dedicated to the mutual fund industry ValueResearchOnline. Check out the top-rated funds there, funds that have a track record of atleast 5 years or more of solid performance. Do some more research, read what the analysts have to say about the fund, fund manager, and its track record, and things like risk/return. You can start form here http://www.valueresearchonline.com/toprated.asp

    Its generally not advisable to start SIPs in funds that have performed best in the last 1 yr. Make sure to check what their record is over the last 3 yrs, 5yrs and since inception. Doing this, and reading the Fund Analysis will lead you to the funds with the best track records. This is where you should be investing your SIP money in, why take chances with unproven funds when there are a host of great funds with super track records like SBI Magnum Contra, HDFC Prudence,etc. It is advisable to invest in only the 5-Star or 4-Star rated funds

    Its generally not advisable to invest in too many funds. You may end up in funds with similar styles and your returns will end up fragmented. Pick 4-5 funds at most and split your money equally to start with. If you have Rs. 2000 to put in SIPs every month, go for 2 funds that you like. If there is Rs. 5000 sparable, go for 4-5 funds. More than that, again split equally among the 4-5 funds

    4. Once funds are identified, you then need to use the SIP purchase option in ICICIDirect or RIS (Regular Investment Scheme) in Citibank. Choose the Fund Company, select the appropriate fund and click on SIP/RIS, enter monthly amount, and you are done!

    5. Make sure to monitor your investments every 3 months or so. Check what returns the fund has given you. Periodically revisit valueresearchonline to see what they have to say about your fund and its rating.


  4. Hi, There is no lengthy procedure. You just have to sign the form and issue a cheque in favour of fund name. For eg “Reliance Growth Fund”. From the next month onwards you amount will be deducted through ECS from your bank. Pancard is compulsory for investing in mutual funds.

  5. 1. Identify your mutual fund want to invest
    2. Visit the mutual fund office with a cheque and copy of pan card
    3. Inform them your requirements, they will properly guide you to the way how you want to invest in SIP, how much amount in each sip and how many months etc…
    4. You can visit some banks too, providing the mutual fund service, a person should be seperatly there for this purpose. Remember, if you are applying directly going to the mutual fund office, you are avoiding the agent charge and no entry load for you. If you apply through any online, or agency, you have to pay agent fee for them from each SIP amount.

    Don’t go for opening any dmat or online account with anybody. It is time consuming and you have to pay maintenance charge for this as well as it is difficult for you to transfer this mutual fund to another account in the future. Better idea is what I said in the above. No headache. Try it

    is this is good enough for you? If you still have doubt contact me on [email protected] Bangalore, I will guide you properly

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