SIP or systematic investment plan is considered as one of the most trouble-free methods for investing money in mutual funds. Through this method, a person can invest money at regular intervals, be it in a week or once a month, it would be in an equal interval. The money in the bank account is then invested in a mutual fund scheme selected by the person so that it would help them in saving money for future use.
Tips to start an SIP in a mutual fund:
There are specific methods and rules that are required to be followed by a person who wants to start a systematic investment plan. Some of the most important rules are stated below.
1. Have your KYC done:
KYC or Know Your Customer is one of the essential things that need to be done before starting a SIP; this is a one-time thing to do and can be helpful for future steps. KYC helps the bank and mutual fund companies to know the customer in a better way.
2. Planning for funds:
A person should never go with the suggested funds by his/her advisor. Before selecting, a person should also know about other types of funds and the idea of where to invest to get a profit. If it’s not done, then a person can get stuck in high priced funds, which can result in a loss. Therefore, planning about your investment pattern is very important.
3. Having a proper investment strategy:
A person who wants to start an SIP in a mutual fund should have an appropriate strategy of investment. A good strategy for the type of funds like large capital funds, flexible funds and many such types is essential. Without a strategy, a SIP will not be fruitful.
Hence, now you know How to Start an SIP in A Mutual Fund. These were some of the basic yet essential tips that should be followed before starting an SIP in a mutual fund. Following the tips will enable you to invest in the right scheme, and enjoy huge returns. For more information on SIP and mutual funds, refer to https://www.investopedia.com/terms/m/mutualfund.asp.