How to Start a ₹1000 SIP Investment: A Step-by-Step Guide

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What Is SIP Investment?

SIP or Systematic Investment Plan has become one of the most popular ways to invest in mutual funds. This is mainly due to the ease and the flexibility it offers. SIP is an automated investment plan that helps invest an amount of your choosing in the mutual fund you want at regular intervals.  These intervals could be weekly, monthly or even annually depending on your need. 

Additional Read: Maximizing Your Returns with the SIP Return Calculator

Though the amount one can invest in SIP does depend on the type of mutual fund you have chosen, SIP does have one edge over other investment plans. SIP investors get to start their investment from relatively smaller amounts, sometimes as low as ₹100. 

Keeping the ₹1000 investment in mind as the goal today, here’s a look at the how’s, where’s and why’s of the process of investing in SIP.

Additional ReadSIP Calculator: Everything About SIP Investment Calculator

How to start a SIP investment

There are a couple of steps that you need to keep in mind when investing in SIP. Here is a breakdown of them for you.

  • Be clear on your financial goals:

To put your money in a SIP investment, you need to first understand which mutual fund suits you. This can be done by figuring out what your overall financial goals are and what your risk aptitude is. 

  • Arrange the documents needed:

It is always a good idea to have all your documents in place. Here is a list of all the documents you will need to make your SIP investment:

  1. Proof of Identity (POI)
  2. Proof of Address (POA)
  3. PAN Card
  4. Bank account details
  5. Passport/Driver license copy for KYC process
  • Complete KYC:

With the help of the required documents, complete your KYC process. This can also be done online. 

  • Register for your SIP Investment:

Post the completion of the KYC process, you can proceed to register for SIP. You can do this step online as well by visiting the website or mobile application of an Asset Management Company (AMC) that you trust. Just provide some basic details on the platform and you are done. 

  • Pick the mutual fund you want to invest in

By this time you should be clear about what mutual fund you want to invest in. So when you register for your SIP investment, you need to mention it.

  • Choose your SIP amount and date:

If you are looking to invest ₹1000, then you need to specify that, on what date you want the amount to be debited each month. Make sure that you have enough funds in your account before the debit date each month, especially if you are setting up the auto-debit facility.

Additional ReadStart Investing with Smart SIPs for Your Family’s Financial Future

Gains in 10, 20 and 30 years with ₹1000 SIP investment

If you are still unsure about investing in SIP, here is a small comparison of how much you can gain in the very first 10 years.

YEAR

Investment PA in ₹

Gain PA in ₹

Total Amount EoY in ₹

2024

12,000

670

12,670

2025

12,000

1,997

26,667

2026

12,000

3,463

42,130

2027

12,000

5,082

59,212

2028

12,000

6,870

78,082

2029

12,000

8,847

98,929

2030

12,000

11,029

1,21,958

2031

12,000

13,441

1,47,399

2032

12,000

16,105

1,75,504

2033

12,000

19,048

2,06,552

Source: Tickertape

This is just the gain you will get in the first 10 years with a simple investment of ₹1000 a month. The next 20 and 30 years will only add to your investment.

The Bottom Line:

A SIP investment is a very convenient way to invest in mutual funds as it promises flexibility to the investors in terms of the amount that they can invest and how regularly they can invest. However, with any investment, it is important to do your due diligence and research before investing.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

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