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SIP is a smart and hassle free mode for investing money in mutual funds. SIP allows you to invest a certain pre-determined amount at a regular interval (monthly/ quarterly)

How does it work?

Your money is auto-debited from your bank account and invested into a specific mutual fund scheme. You are allocated certain number of units based on the ongoing market rate (called NAV or net asset value) for the day.
Every time you invest money, additional units of the scheme are purchased at the market rate and added to your account. Hence, units are bought at different rates and investors benefit from Rupee-Cost Averaging and the Power of Compounding.

Rupee-Cost averaging

During volatile markets, most investors remain skeptical about the best time to invest and try to 'time' their entry into the market. Rupee-cost averaging allows you to opt out of the guessing game.
Since you are a regular investor, your money fetches more units when the price is low and lesser when the price is high. During volatile period, it may allow you to achieve a lower average cost per unit.

Power of Compounding

Albert Einstein once said, "Compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn't... pays it."
The rule for compounding is simple - the sooner you start investing, the more time your money has to grow.

Example

If you started investing Rs. 10000 a month on your 40th birthday, in 20 years time you would have put aside Rs. 24 lakhs.
If that investment grew by an average of 7% a year, it would be worth Rs. 52.4 lakhs when you reach 60.

However, if you started investing 10 years earlier, your Rs. 10000 each month would add up to Rs. 36 lakh over 30 years.
Assuming the same average annual growth of 7%, you would have Rs. 1.22 Cr on your 60th birthday - more than double the amount you would have received if you had started ten years later!


Risk Factors: Mutual Fund investments are subject to market risks. Read all scheme related documents carefully.
The illustrations mentioned above are for information purposes only and should not be construed as an investment advice.
It does not in any manner imply or suggest performance of mutual fund scheme. The recipient of this document should rely on his/her investigations and take his/her own professional advice.

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Attention Investors

  1. Prevent Unauthorized Transactions in your account. Update your Mobile Numbers/Email IDs with your stock brokers. Receive information of your transactions directly from the Exchange on your Mobile/Email at the end of the day.
  2. Prevent Unauthorized Transactions in your demat account. Update your Mobile Number with your Depository Participant. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat account directly from CDSL on the same day. (Issued in the interest of Investors)
  3. KYC is one-time exercise while dealing in securities markets - once KYC is done through a SEBI-registered intermediary (Broker, DP, Mutual Fund, etc.), you need not undergo the same process again when you approach another intermediary.
  4. Investors need not issue cheques while subscribing to IPO. Just write the bank account number and sign in the application form to authorize your bank to make payment in case of allotment. No worries regarding refund since the money remains in investor's account.
  5. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.
  6. Update your Mobile Number and Email id with your stock broker/depository participant and receive OTP directly from the depository on your Email id and/or Mobile Number to create pledge.
  7. Pay 20% upfront margin of the transaction value to trade in cash market segment.
  8. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued vide circular reference NSE/INSP/45191 dated July 31, 2020, and NSE/INSP/45534 dated August 31, 2020, and other guidelines issued from time to time in this regard.
  9. Check your Securities/MF/Bonds in the consolidated account statement issued by NSDL/CDSL every month.