How to invest in an SIP?
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How to invest in an SIP?

  • Highlights

  • Know your financial goals before you start investing

  • Find out the investment horizon you want

  • Gauge your risk appetite clearly

  • Choose asset classes that help you meet your financial goals easily

The trends of financial investment change over time. In the last decade, Systematic Investment Plans (SIPs) have emerged as one of the most popular modes of investment, as they provide steady returns over a long period of time. Various investors are now considering SIPs as a mode to gain attractive returns.

Here is a step by step process on how to invest in SIPs:

Set your financial goals

While investing, it is important to set your financial goals and investment timeline. Without a goal in mind you will be tempted to redeem your investment sooner thereby nullifying the effects of SIP. A well-defined goal will motivate you to accumulate your investments over time to capitalize on the compounding benefits of SIP.

Decide your investment horizon

Merely deciding your financial goals is not enough. You need to calculate the actual monetary value of your goals. Determining the investment corpus will help you plan the amount of investment and the time needed to achieve it. Be transparent about your investment capacity. Use the Bajaj Finserv SIP calculator for better planning of your investments.

Consider your risk appetite

Mutual funds are designed to cater to all types of investors. You have an option of choosing from high risk equity funds, moderate risk balanced funds and low risk debt funds. Your risk appetite mainly depends on your liabilities. Consider all facts affecting your risk-taking capacity before making any investment decision.

Decide your mode of investment

There are two modes of investing in SIPs - offline and online. Offline modes consist of investing through mutual fund agents, financial institutes, and corporate agents. They involve a lot of paperwork and are often time consuming. Online modes are fast and convenient due to minimal paperwork involved. Online avenues of investing are online MF agents, share broking portals and through financial institutes. Click here to start investing online through Bajaj Finserv.

Arrange your KYC documents

To start investing in mutual funds through SIPs you need to submit your KYC documents. The required documents are a photo identity proof, address proof, cancelled cheque and photograph of the investor.

Select funds to invest

Mutual funds can be classified in liquid, equity, balanced or debt funds. Liquid funds are ideal for short term. Dividing investment in debt, equity and balanced funds is crucial for medium term goals. And for a long-term goal you can depend more on equity oriented mutual funds. Ideally, you should invest in a diversified equity scheme that has performed consistently for the last three, five, or ten years.

Select the SIP frequency

You can select the frequency of investing in SIPs. Monthly, quarterly, and half yearly investment options are available. You can also set the SIP date, for example 10th or 12th of every month.

Submitting the application form

Do not simply sign the document, you must read and fill in the application yourself. Make sure you understand the clauses involved with your investments like exit load, nominee, and others, for a smooth investment experience.

Bajaj Finserv brings you pre-approved offers for personal loans, home loan, business loans and a host of other financial products. Not only does this simplify the process of availing financing, but also helps you save on time. All you have to do is share a few basic details and check out your pre-approved offer. Need instant financing? Think it. Done with Bajaj Finserv.

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Step-by-step guide to choosing an SIP