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FAQ
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09. Systematic Investment Plan
1) What is a Systematic Investment Plan (SIP)?
2) What are the advantages of SIP?
3) What is rupee cost averaging?
4) How does an SIP help in disciplined investing?
5) Is SIP a different / better approach for savings?
6) Is SIP a tool that helps improve your investment returns?
7) Is SIP same as monthly income plan?
8) How does an SIP help under different market conditions and over time?
9) How can I make payment for my SIP transaction?
10) Can I register ECS for any bank account?
11) If I register ECS for one scheme, do I need to register for ECS again when I apply for a new SIP?
12) Can I change my bank mandate during the SIP period?
13) When will the SIP amount be debited form my bank account?
14) What are the charges if I want to set up an SIP through Fundsupermart.com?
15) How long does it take to register an ECS mandate?

Q: What is a Systematic Investment Plan (SIP)?

A: An SIP refers to a specific amount that will be invested for a chosen period on the chosen date at regular intervals. A fixed amount is used to buy units at the NAV-related price prevailing on the date of investment. Since a fixed amount is invested, more units are bought when the price is low and fewer units are bought when the price is high.
 
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Q: What are the advantages of SIP?

A: Following are the advantages of SIP:

-Rupee cost averaging
-Power of compounding
-Disciplined investing
-Lighter on the wallet
-Convenience
 
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Q: What is rupee cost averaging?

A: Rupee cost averaging involves investing a fixed amount of money regularly; typically once a month. It lowers the average cost of investments. It is a good way to even out market fluctuations. Most mutual funds have an SIP feature that allows for easy and convenient rupee cost averaging.
 
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Q: How does an SIP help in disciplined investing?

A: The cardinal rule of building your corpus is to stay focused, invest regularly and maintain discipline in your investing pattern. A few hundred rupees set aside every month will not pinch your monthly disposable income. You will also find it easier to part with a few hundred rupees every month rather than big lump sums in one go.
 
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Q: Is SIP a different / better approach for savings?

A: An SIP is a disciplined approach to savings. It is similar to a regular savings scheme like a recurring deposit with a bank or post office where we can put small amounts at periodic intervals. The only advantage is that investing in a mutual fund through SIP allows systematic investments into equity funds which have a possibility of generating higher returns.
 
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Q: Is SIP a tool that helps improve your investment returns?

A: SIP is not a tool to improve investment returns. The primary objective of an SIP is to enable investors clearly define an investment goal and help them reach it through systematic investment in select equity-oriented mutual fund schemes that have a track record of consistent performance. Systematic investment adds value through rupee cost averaging and the power of compounding.
 
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Q: Is SIP same as monthly income plan?

A: A monthly income plan is a hybrid product whereby you get income in the form of dividends (though they are not guaranteed). SIP is an investment option that allows you to invest systematically. You can set up an SIP in a monthly income plan.
 
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Q: How does an SIP help under different market conditions and over time?

A: When investing through an SIP it is not necessary to time the market. Investments will be made systematically every week, month or quarter depending on the frequency selected. Since the investment amount will be consistent, units accumulated during a volatile time when the market falls will be higher compared to units allotted when the markets are priced higher. The investor gets the benefit of rupee cost averaging.
 
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Q: How can I make payment for my SIP transaction?

A: You can make payment for SIP transactions only through ECS registration. The amount will be directly debited from your bank account one business day prior to your SIP date.
 
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Q: Can I register ECS for any bank account?

A: If your bank participates in the ECS clearing cycle then you can register with that bank account for SIP creation.

Please note: You will not be able to create SIP for those banks which take more than 1 day for clearance of funds. In order to adhere to our payment timelines with the AMCs, we cater to only those locations where the clearance of funds can be done in one day.
 
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Q: If I register ECS for one scheme, do I need to register for ECS again when I apply for a new SIP?

A: ECS mandate needs to be registered per scheme for every new SIP creation. For e.g., if you have already registered for ECS with a bank account for ABC Fund and now you want to start another SIP with the same bank account for XYZ Fund, you need to register for ECS again for XYZ fund.
 
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Q: Can I change my bank mandate during the SIP period?

A: Once an SIP is registered, the ECS mandate cannot be changed. You can cancel / terminate the existing SIP and mandate and register for a new SIP with a new ECS mandate form.
 
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Q: When will the SIP amount be debited form my bank account?

A: The SIP amount will be debited one business day prior to your SIP date. If the previous day is a non-business day, then the SIP amount will be debited on the prior business day.
 
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Q: What are the charges if I want to set up an SIP through Fundsupermart.com?

A: Currently there are no charges for registering an SIP on the Fundsupermart.com platform .
 
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Q: How long does it take to register an ECS mandate?

A: On receipt of the ECS mandate form along with the self-attested cancel cheque, the ECS mandate will be registered in 35 working days.
 
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For further assistance, call our helpline at +91 22 4219 9494 from 9:30 am to 5:30 pm on Monday to Friday (excluding public holidays).