How to open an SIP account

If you wish to increase your net worth in the long run through SIP, opening a SIP account online is easily doable.
How to open SIP account
3 min
01-July-2024

You can begin investing in SIPs anytime by creating an online SIP account. It takes minutes to register for and open an online SIP account. To start investing, all you need to do is open the account, select the plan that works best for you, and begin your investment journey.

This article will explain how you can open an SIP account online and what are the eligibility requirements.

Can I open an SIP account online?

Systematic Investment Plans (SIPs) are popular when it comes to investing, and most investors like to invest in mutual funds through SIPs.

You can invest in mutual fund SIPs in two ways: online or through a mutual fund distributor. However, many investors are still unsure of how to open an online SIP account. Let us now understand the documentation requirements and how you can open an SIP account online.

Documents required to open an SIP account online

The first step in opening a mutual fund SIP account is to finish your mutual fund e-KYC. Your name, address, place of business, and identification are all verified as part of the identity verification process.

The documents you must submit include:

  • A copy of the cancelled check from your bank account
  • A passport-size photo
  • Proof of identity and address (PAN card, voter ID, passport, Aadhaar card, utility bill, or driver's licence)
  • Bank statement
  • Your employer's proof of address (optional)

High-return mutual fund categories for smart investing

Equity Mutual Funds Hybrid Mutual Funds Debt Mutual Funds
Tax Saving Mutual Funds NFO Mutual Funds Multi Cap Mutual Funds

 

How to open an SIP account online?

Compared to the conventional method of investing, which involves filling out an application, investors may find it easier to open an SIP account online, thanks to several digital platforms.

However, completing the e-KYC is a prerequisite for opening an SIP account online. To comply with KYC regulations, you must have all the documents in place, such as proof of address, PAN Card, etc. The actions that must be taken are as follows:

Step 1: Collect the necessary documents

Gather the required documents. As previously stated, you need a PAN card, proof of address (driver's licence, utility bill, bank statement, etc.), a passport-size photo in .jpeg or .png format, and a cancelled cheque for the bank details.

Step 2: Be KYC compliant

Next, you must comply with KYC. When the documents are prepared, you can complete the KYC on any AMC or RTA website that offers an e-KYC option.

E-KYC stands for electronic KYC. You must complete e-KYC by providing basic information such as name, date of birth, address, and mobile number. You must also upload a passport-size photo, a copy of your proof of address, and a copy of your PAN card. To verify the information, an in-person video conference is necessary for IPV (In-Person Verification).

Step 3: SIP Login

Register with a financial advisor or an Indian broker after completing KYC. You are free to select any SIP plan to invest in after registering.

Step 4: Decide investment amount, scheme plan and option

Select the mutual fund scheme, option, and investment amount. This is a crucial phase in which you must select the scheme name and SIP amount. Typically, investors have the choice between regular and direct plans, as well as between growth, dividend distribution, and dividend reinvestment options.

Most AMCs offer an online SIP calculator to assist investors in determining how much to invest daily, monthly, weekly, etc., to accumulate the specified goal corpus.

Step 5: Decide payment mode and date

Select the payment date and mode. You must choose a particular date of the month and make the payment for the first SIP instalment after deciding whether to start a daily, weekly, monthly, or quarterly SIP investment. It's crucial that you pick this day carefully, as the amount gets deducted from your account.

You must then choose the method of payment. There are a few choices available, including having the money automatically deducted from your account via net banking, NEFT/RTGS payment, or OTM (one-time mandate) registration.

Step 6: Submit the form

After filling out the form online, you should submit it to the AMC. The AMC sends an acknowledgement via SMS and email. You will receive an email with the SOA (Statement of Account). The units will be distributed on the same day if the SIP is submitted online (if you have a Demat account) by the deadline specified in the scheme.

Eligibility for opening an SIP account

Make sure you have the following documents in order to be eligible for opening an SIP account:

  • PAN Card: This is your tax identification number and is necessary for any financial transaction.
  • Proof of address: Any legitimate document containing your current address, such as a utility bill, bank statement, driver's licence, or Aadhaar Card, will do.
  • Cheque cancellation: This is necessary to link your bank account to receive automatic SIP payments.

Conclusion

Any SIP investment requires careful consideration and planning, taking into account variables including financial goals, return expectations, risk tolerance, and the regular investment amount. Remember that before making any investment decisions, whether you choose to use SIP or another approach, you must do extensive research and have a comprehensive grasp of the particular SIP and its associated terms.

Now that you know how to open an SIP account online, you should also know that SIP needs planning. You can visit the Bajaj Finserv Mutual Fund Platform, which enables you to compare several mutual funds and select those that perfectly suit your financial needs and goals. You can also use the lumpsum calculator and SIP calculator to know your potential returns.

Essential tools for mutual fund investors

Mutual Fund Calculator Lumpsum Calculator SIP Calculator Step Up SIP Calculator
SBI SIP Calculator HDFC SIP Calculator Nippon India SIP Calculator ABSL SIP Calculator
Tata SIP Calculator BOI SIP Calculator Motilal Oswal Mutual Fund SIP Calculator Kotak Bank SIP Calculator

Frequently asked questions

Can we open SIP online?
Yes. You can open an SIP account online by completing the e-KYC process, choosing your preferred SIP plan, along with the date and SIP amount, and submitting your SIP online.
Can I open SIP through a bank?
Yes, you can. Several banks enable investing in mutual funds as intermediaries and through their own funds.
Is online SIP safe?
Yes. Registering for an SIP online is safe, provided you use a reputed platform, your account is secured, and the website is verified.
Can SIP go in loss?
Yes, you can incur losses while investing through SIPs. This is due to market fluctuations, risks associated with asset allocation, government policy changes, inflation, and changing interest rates.
Does SIP guarantee returns?
No. Since SIP investments are always subject to market fluctuations and risks, they do not always guarantee positive returns.
Is it a good time to start SIP?
It is always a good time to start investing for your future. However, financial objectives for the long-term and individual circumstances must be considered. That said, an early start and regular investments after that usually lead to substantial wealth creation in the long run.
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Disclaimer

Bajaj Finance Limited (“BFL”) is an NBFC offering loans, deposits and third-party wealth management products.

The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. 

This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.