What is SIP?

Systematic Investment Plan (SIP) is a very common terminology asked by the investors new to mutual funds. Keep progressing on your dreams step-by-step by investing through SIP.

With SIPs, you can invest an amount as small as Rs 500 per month for a chosen period of time. It helps you in averaging out your cost of investments and benefit from the power of compounding. The power of compounding works best when you stay invested over a long time period which may help your money earn return over the years.

SIP is facility for investing regularly (weekly, monthly or quarterly) a fixed amount. SIP allows investors to buy units of the selected mutual fund scheme on a selected date and frequency chosen by them. Investments through SIP can also be made through post-dated cheques or through ECS (auto-debit) facility.

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What is SIP?

Systematic Investment Plan (SIP) is a very common terminology asked by the investors new to mutual funds. Sapna In Progress denotes your dreams are in progress. Keep progressing on your dreams step-by-step with an SIP.

With SIPs, you can invest an amount as small as Rs 500 per month for a chosen period of time. It helps you in averaging out your cost of investments and benefit from the power of compounding. The power of compounding works best when you stay invested over a long time period which may help your money earn return over the years.

SIP is a method of regularly (weekly, monthly or quarterly) investing a fixed amount. SIP allows investors to buy units of the selected mutual fund scheme on a selected date and frequency chosen by them. SIP investments can also be made through post-dated cheques or through ECS (auto-debit) facility.

  • Investors can aim for achieving their financial dreams by goal-based investment in mutual fund schemes through SIP in a disciplined and systematic way from their regular savings.
  • Investors may create wealth over long investment horizons through the power of compounding.
  • Investors need not time the market and can take advantage of volatility through Rupee Cost Averaging

Illustration

Let us assume you are 30 years old and have a two year old child. The table below shows how much you need to invest through monthly SIPs for your different life-stage goals.

Aapke Sapne Horizon Corpus needed Monthly SIP*
Down payment for house 5 years Rs 10 lakhs 12,914
Children's higher education 15 years Rs 45 lakhs 10,857
Children's marriage 23 years Rs 35 lakhs 3,285
Retirement Planning 30 years Rs 4 crores 17,695

*Assuming return on investment of 10%. Note: Numbers are purely illustrative for investor education purposes. Please consult with your financial advisor to plan for your goals.

You can use a Sapnaplanner to calculate the above and plan your investments.

Systematic Investment Plan is facility through which an investor can invest a fixed amount in a mutual fund scheme of his / her choice at a fixed frequency which can be weekly, fortnightly, monthly or quarterly. The bank ECS mandate/auto debit instruction ensures that the amount gets debited automatically on the chosen date and frequency from the investor’s bank account and invested in the chosen mutual fund scheme. The number of units so purchased depends on the Net Asset Value (NAV) of the scheme on the investment date. The systematic investment tenure can either be fixed or perpetual, Investor can choose the option ‘Until cancelled’. However, the investor can cancel the SIP anytime by writing to the AMC branch office or an RTA office. AMCs normally take around 15 days’ time from the date of request made by the investor to discontinue the investments.

In Systematic Investment Plan , there is lesser risk of timing because investors buy units at different price points (both, at low and high NAVs). Investor buy more units when the market is low and buy less when the market is high. This is known as rupee cost averaging of purchase price and is especially effective in investment in equities as equity as an asset class is volatile. Rupee cost averaging usually lowers the cost of acquisition during bear markets and seeks to give better returns in the long term.

Under Systematic Investment Plan you can benefit from the power of compounding, which is nothing but interest earned on interest or profits earned on profits. The biggest advantage of mutual fund systematic investment plans is that, you may to create wealth with relatively small regular investments over a long investment tenure through the power of compounding. The below table shows a scenario analysis of the corpus built over different investment tenures and amount (assumption - 12% Extended Internal Rate of Return (XIRR)

Monthly SIP Amount (Rs.) 3,000 5,000 7,000 10,000 20,000 50,000
SIP Tenure (In years) 30 25 20 15 10 5
Corpus Accumulated (In Lakhs) 105.90 94.88 69.94 50.46 46.47 41.24

The above is for illustration purposes only.

As per SEBI regulations, if you want to invest in the schemes of 战雄电竞 through Systematic Investment Plans, you need to be KYC compliant. You can now complete KYC requirements online through any AMC website which are offering this facility. You can fulfil KYC requirements by submitting filled in KYC form with your self-attested photograph affixed on the KYC form, to the AMC or the concerned RTA (different AMCs have different RTAs). The KYC form can also be downloaded from the AMC website. Along with the duly filled-in KYC form, you also need to submit self- attested copies of your identity and address proof (For example - it can be Aadhar Card or Passport or Driving License etc.) along with PAN card copy

If you are submitting the KYC documents directly to the AMC or RTA, in person verification (IPV) will be required. For IPV, you will have to carry original documents of ID, address proof and PAN card. AMFI registered mutual fund distributors are also authorized to conduct IPV. Through a mutual fund distributor, the IPV can be conducted at your place. You can also do a Video KYC by visiting the AMC website which are offering this facility – This is a completely paperless process and helpful if you want to do SIP investment online.

If you are an existing mutual fund investor, you are likely to have fulfilled all KYC requirements already. Hence, you need not follow the process mentioned above and can start SIP investment online or through a mutual fund distributor immediately.

Bank account is a mandatory requirement for starting systematic investments. You have to provide your bank account details in the application form as well as in the auto debit mandate form commonly known as SIP registration form. A cancelled cheque of the mentioned bank account with your name printed on it is required as a supporting document.

In the application form you need to mention the scheme name in which you want to start the investment. Along with the scheme name you also have to mention the scheme option – growth or IDCW and whether you want to invest in regular plan (through a mutual fund distributor) or in direct plan (directly with the AMC). If you are investing in a regular plan, the AMFI Registration Number (ARN) and EUIN number (Employee Unique Identification number) of the distributor has to be provided. If you are investing in regular plans, the distributor is expected to help you with filling out the application form and submission to the AMC

Any date SIP – This method allows you to select a scheme, its frequency and the amount. You have to mention the start date and end date of investment on the application form. Based on your mandate, the AMC will deduct the amount on the specific date and allot units to you. The systematic investment will continue till the end date chosen by you. You can continue your SIP account even after the investments have stopped and redeem whenever you want.

Perpetual SIP – Perpetual SIP is similar to Any Date SIP, the only difference is that there is no end date. While filling up the Systematic Investment Plan form, if you choose end period as ‘perpetual’, it will continue until you request the AMC to stop it. Once it is stopped by you, the AMC will stop deducting the instalment amount from your bank account. Post the SIP is cancelled, the NAV may continue to grow and you can redeem them whenever you want.

Top up SIP – Top up SIP allows you to increase the instalment amount at certain intervals, say – annually. You can top-up the instalment amount by a certain percentage in the chosen frequency. For example – your investment SIP frequency is monthly, amount is Rs 5,000, top up percentage is 10% and you want to increase it annually. In the first year, the AMC will deduct Rs 5,000 per month, in the second year Rs 5,500 per month and in the third year Rs 6,050 and so on.

This facility helps you invest more and create larger corpus in the long run.

What's your Sapna?

We, at Mirae Asset 战雄电竞 , provide extensive financial information to all our clients, yet we want them to have easy access to an investment knowledge centre that will answer all their queries within moments. This calculator may help you plan your wealth, plan for your retirement, your dream home, childrens education through SIP and progress towards your sapna.

  • Amount needed

    `
    ` 1 Lakh
    ` 100 Lakhs

    Expected rate of return (%)

    %
    1%
    20%

    Want amount in (years)

    Yrs
    1 Yr
    60 Yrs

    Rate of inflation (%)

    %
    0%
    10%

    View our calculate methodology Click Here

    An Investment Plan that May Help You Achieve Your Sapna

    Monthly
    investment needed

    ` 22,623

    Total
    Amount Payble

    ` 98,73,496

    Mail me the calculation
  • Retirement amount

    `
    ` 1 Lakh
    ` 100 Lakhs

    Expected rate of return (%)

    %
    1%
    20%

    Want a retirement in (years)

    Yrs
    1 Yr
    60 Yrs

    Rate of inflation (%)

    %
    0%
    10%

    View our calculate methodology Click Here

    An Investment Plan that May Help You Achieve Your Sapna

    Monthly
    investment needed

    ` 17,431

    Total
    Amount Payble

    ` 72,82,965

    Mail me the calculation
  • Current price of house

    `
    ` 10 Lakhs
    ` 50 Cr

    Expected rate of return (%)

    %
    1%
    20%

    Want house in (years)

    Yrs
    1 Yr
    60 Yrs

    Rate of inflation (%)

    %
    0%
    10%

    View our calculate methodology Click Here

    An Investment Plan that May Help You Achieve Your Sapna

    Monthly
    investment needed

    ` 3,70,897

    Total
    Amount Payble

    ` 2,19,61,500

    Mail me the calculation
  • Current cost of education

    `
    ` 1 Lakh
    ` 100 Lakhs

    Expected rate of return (%)

    %
    1%
    20%

    Age of child in (years)

    Yrs
    1 Yr
    60 Yrs

    Rate of inflation (%)

    %
    0%
    10%

    View our calculate methodology Click Here

    An Investment Plan that May Help You Achieve Your Sapna

    Monthly
    investment needed

    ` 15,036

    Total
    Amount Payble

    ` 31,05,848

    Mail me the calculation
  • Current cost of marriage

    `
    ` 1 Lakh
    ` 100 Lakhs

    Expected rate of return (%)

    %
    1%
    20%

    Want to marry in (years)

    Yrs
    1 Yr
    60 Yrs

    Rate of inflation (%)

    %
    0%
    10%

    View our calculate methodology Click Here

    An Investment Plan that May Help You Achieve Your Sapna

    Monthly
    investment needed

    ` 24,387

    Total
    Amount Payble

    ` 34,36,372

    Mail me the calculation
  • Current price of tour

    `
    ` 1 Lakh
    ` 100 Lakhs

    Expected rate of return (%)

    %
    1%
    20%

    Want tour in (years)

    Yrs
    1 Yr
    60 Yrs

    Rate of inflation (%)

    %
    0%
    10%

    Vew our calculate methodology Click Here

    An Investment Plan that May Help You Achieve Your Sapna

    Monthly
    investment needed

    ` 24,387

    Total
    Amount Payble

    ` 34,36,372

    Mail me the calculation

Disclaimer : The calculators are based on assumed rate of returns and meant for illustration purposes only. The calculators are designed to assist you to get a better understanding on how returns would have panned out in various scenarios. This calculator alone is not sufficient and shouldn’t be used for the development or implementation of any investment strategy. In the preparation of the calculator, Mirae Asset 战雄电竞 (MAMF) has tied up with Advisorkhoj who have developed and integrated the calculator with our website. The calculator uses information that is publicly available and information developed in-house. Information gathered and material used in this calculator is believed to be from reliable sources. MAMF however does not warrant the accuracy, reasonableness and/or completeness of any such information. The examples do not purport to represent the performance of any security or investments. It is neither an investment advice nor should it be construed as indicative of any of the schemes of Mirae Asset 战雄电竞 . Invest as per your risk appetite and time horizon. In view of individual nature of tax consequences, each investor is advised to consult his/ her own professional tax advisor before taking any investment decision. Contact your financial advisor for detailed insight into the investment advice. Mirae Asset Investment Managers (India) Private Limited (“Mirae AMC”) shall have no responsibility/liability whatsoever for the accuracy or any use or reliance thereof of such information. The AMC, its associate or sponsors or group companies, its Directors or employees accepts no liability for any loss or damage of any kind.

Let’s Start an SIP

SIP Calculator

Use our SIP calculator to find out how much you can save.

What is your SIP amount?

`
` 5 k
` 20 Lakhs

What is your period?

Yrs
1 Yr
99 Yrs

Expected rate of return (%)

%
1%
20%

Your Target goal amount

`
` 1 Lakh
` 50 cr

By when you need this

Yrs
1 Yr
60 Yrs

Expected rate of return (%)

%
1%
20%

Rate of Inflation (%)

%
0%
10%

SIP online calculators work based on the following methodology Click Here

How can SIPs help in achieving your goals? Click Here

Total Value of your Investment

` 10,36,534

Invested Amount

` 9,00,000

Growth value

` 1,36,534

Total Value of your Investment

` 8,43,799

Invested Amount

` 5,01,840

Growth value

` 3,41,959

Monthly SIP Amount

` 3,485

SIP Delay Cost Calculator

Time is the best wealth creator - The earlier you start and longer you stay invested, the more rewarding it is! Hence avoid delays in investing.

Want to know how a delay in SIP can impact your returns?

Enter your current age

Yrs
` 20 Yrs
` 80 Yrs

Enter the SIP amount

`
` 5 k
` 20 Lakhs

Enter the age till which you plan to invest

Yrs
21 Yrs
80 Yrs

Enter the estimated rate of return (% P.A.)

%
1%
20%

If you were start an SIP earlier, how many years ago would you have started it?

Yrs
1 Yr
20 Yrs

Cost of delay

Future value of your SIP investment at the age of 22

` 31,06,14,119

Difference in future value due to delay in starting SIP

` 61,22,92,446

Future value of your SIP investment if you had started 9 yrs earlier

` 30,16,78,327

Additional SIP investment required every month to achieve the higher future value had you started investing earlier

` 3,94,246

It should not be construed as a promise on minimum returns and safeguard of capital. MAMF is not guaranteeing or promising, or forecasting any returns. SIP does not assure a profit or guarantee protection against loss in a declining market

Benefits of investing through SIP

  • Disciplined investing

    By choosing to invest at a regular frequency, you bring discipline to your SIP investments as it is treated like any other fixed expense in a month, be it paying rent, buying household goods, children’s school fee, going out during the weekend etc. Through disciplined investing, you stop worrying about how much to invest and when.

  • Wide range of schemes to choose from

    You get a whole range of schemes to choose from – different funds from equity, debt and hybrid category – you can choose the one which suits your investment objective and risk appetite.

  • Convenient and easy to monitor

    To start, all you have to do is fill up and sign the SIP application form along with the auto debit / ECS mandate form and the amount will be deducted from your bank account on the chosen date every month. You can also start Systematic investment plan online by visiting the AMC website without involving any paperwork. Progress of your systematic investments can be monitored through the account statements sent periodically by the AMC. Alternatively you can login to the AMC website to check the investments details.

  • Investment diversification

    Starting systematic investments in an equity/ hybrid mutual fund may help you to diversify your investment risk as you invest in various sectors and companies.

  • May help achieve long term goals

    Systematic investment plan may help in achieving your long-term sapne, like - Retirement, Children education, buying a house and wealth creation etc. You can start systematic investments by setting a target amount for the goal and investing monthly over the goal time period.

    For example – You are aged 30 and want to build a corpus of Rs 5 Crores for retirement at age 55. Accordingly, you need to invest Rs 27,900 per month for the next 25 years (assuming you get 12% return on your investments).

  • Tax savings

    By investing systematically in ELSS schemes, you can save taxes under Section 80C of The Income Tax Act 1961 on your investments upto Rs 150,000 in a financial year.

  • Rupee cost averaging

    A simple approach to long term investing is commitment and discipline to invest a fixed sum regularly for a fixed time period and sticking to the schedule irrespective of the market conditions. Rupee cost averaging in a way ensures that you buy more units when the units prices (NAV) are low and fewer units when the unit prices are high. Suppose you are investing Rs 5,000 every month. When the NAV is Rs 25, you will get 200 units (Rs 5000/25 = 200. However, if the market corrects and the NAV drops to 22, you will get 227.272 units (Rs 5,000/22 = 227.272). As you can see, you bought more units when the markets corrected.

Learn more about SIP

Choose the right SIP amount to reach your goal

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Remain Invested In SIPs For Deliverance From Market Volatility, Shouldn’t You?

Systematic Investment Plans, or SIPs as they are popularly called, have caught the fancy of investors...

Read More
How to open SIP account online

Good investment advisors are increasingly endeavouring that their investors do not make random investments in mutual funds...

Read More
Use goal-based investing to achieve your lifetime goals

Most of us make investments with a single-minded focus on maximizing returns. This often leads to investment mistakes like trying to time the market...

Read More
What is Top Up SIP and how does it work

Mutual fund Systematic Investment Plan (SIP) is an effective and convenient way which may create wealth in the long term.

Read More
Top up your wealth with SIP Top-up

Systematic Investment Plans (SIPs) offered by mutual funds need no introduction. They are quite popular among retail investors - a convenient way to invest regularly...

Read More

FAQ's

It is taxed in a first in first out (FIFO) method. This means that if you redeem part of your SIP investments, the earliest instalments are redeemed first and the later instalments are redeemed later. For instance, if you made 36 monthly instalments and you want to redeem part of the investments, your initial instalments (first, second, third and so on) are redeemed first.

This means that in order to qualify for long-term capital gains, each of your instalments in the invested corpus must complete at least one year (in case of equity or equity oriented schemes). For equity or equity oriented schemes, long-term gains (those made over one year) over Rs 1 lakh in a financial year is taxed at 10 per cent and short-term gains are taxed at 15 per cent.

Yes, you can save taxes under Section 80C of the Income Tax Act 1961 if your systematic investments are in ELSS mutual fund schemes. You can invest upto Rs 150,000 in a year for claiming deductions under Section 80C of The Income Tax Act 1961.

You can invest online directly through AMC website. As a new investor, there is a one-time documentation, called KYC (know your customer), which you need to complete. If you have a PAN Card, an Aadhaar card and online-banking facility, then you can start mutual fund systematic investments online immediately after fulfilling the KYC formalities online.

The other way is to contact a mutual fund distributor. The distributor will help you with the entire procedure and this is convenient for a first-time investor.

The whole idea of Systematic investing is that you should be consistent with your investments. When you step up your investments for a limited period, then that is not consistency. You should continue your step-up SIP investments as long as you can. This not only helps you invest more as your income grows up annually but you may also get a higher corpus at the end of the investment tenure.

Yes, you can cancel your on-going Systematic Investments even if the period chosen is ‘till cancellation’ by writing to the AMC. The AMC generally takes two weeks to implement your SIP cancellation request.

No, there is no upper limit for Systematic investments. You can invest as much as you want. Due to compounding factor, big investments may lead to large wealth creation. Therefore, big amount may be a good option.

Help us get in touch with you.

You may consult your Financial Advisor and 战雄电竞 Distributor before taking investment decisions.

Disclaimer: An Investor Education and Awareness Initiative by Mirae Asset 战雄电竞

All 战雄电竞 investors have to go through a one-time KYC (Know Your Customer) process. Investors should deal only with Registered 战雄电竞 s (RMF). For further information on KYC, RMFs and procedure to lodge a complaint in case of any grievance, click here

Disclaimer: The calculators are based on assumed rate of returns and meant for illustration purposes only. The calculators are designed to assist you to get a better understanding on how returns would have panned out in various scenarios. This calculator alone is not sufficient and shouldn’t be used for the development or implementation of any investment strategy. In the preparation of the calculator, Mirae Asset 战雄电竞 (MAMF) has tied up with Advisorkhoj who have developed and integrated the calculator with our website. The calculator uses information that is publicly available and information developed in-house. Information gathered and material used in this calculator is believed to be from reliable sources. MAMF however does not warrant the accuracy, reasonableness and/or completeness of any such information. The examples do not purport to represent the performance of any security or investments. It is neither an investment advice nor should it be construed as indicative of any of the schemes of Mirae Asset 战雄电竞 . Invest as per your risk appetite and time horizon. In view of individual nature of tax consequences, each investor is advised to consult his/ her own professional tax advisor before taking any investment decision. Contact your financial advisor for detailed insight into the investment advice. Mirae Asset Investment Managers (India) Private Limited (the AMC) shall have no responsibility/liability whatsoever for the accuracy or any use or reliance thereof of such information. The AMC, its associate or sponsors or group companies, its Directors or employees accepts no liability for any loss or damage of any kind.

战雄电竞 investments are subject to market risks, read all scheme related documents carefully.

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