How to invest in Mutual Funds through SIP

Investing in mutual funds through SIP is the best option as it optimizes the risk and reward ratio. See, How to invest in Mutual Funds through SIP.

AtoZForex – A Systematic Investment Plan (SIP) is a simple, flexible, reliable investment plan to invest your money. The funds get auto debited from the saving bank account of the investor and are invested into a particular mutual fund scheme.

How to invest in Mutual Funds through SIP

In SIP investors are allocated a certain number of units based on the market value which is also known as NAV or net asset value. Here, I will guide you step-by-step for How to invest in Mutual Funds through SIP.

#Step 1- Understanding the Risk profile and Objective for investment

The investor would first understand his or her risk profile before investing. Generally, older the fund and financial obligations lower the risk profile. Though, one can learn risk management through various online tools.


#Step 2- Choose the Mutual fund before investing

Investors can choose among various types of mutual fund schemes for investing in SIP. An investor should choose funds based on his or her risk profile and personal goals. Most important, one should invest in Equity-oriented funds in case you want to invest for the long term and with moderate risk profile.


#Step 3- Choose the date of SIP

You can choose multiple dates for SIP installment per month. Every mutual fund company has their own dates for executing the orders, but usually, dates are 1, 5, 10, 15, 20, and 28.

#Step 4- Duration of SIP

SIPs are a great way to fulfill your goals and you can calculate the SIP amount required for planning goals using Goal Calculator online.

#Step 4- Invest offline or online

Investors have online as well as offline option to invest in SIP. But I strongly suggest to chooses online option because you can easily track the performance, change the dates of the SIPs, Redeem or transferring the NAV units online.

#Step 5- Sleep till Goal date

Systematic investment plans are the best way to create long-term wealth for fulfilling financial goals and saving taxes. You should not check daily prices of Mutual funds and should not attempt to time the market with the investment plans.

Think we missed something? Let us know in the comments section below.

    Share Your Opinion, Write a Comment