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Systematic Investment Plan (SIP)

Often, we wish to invest regularly, but forget to do so. As a result, we may end up not setting aside enough for investments. Systematic Investment Plans or SIPs help you avoid this.

Under SIP, you automate your monthly investment activities. It allows you to spread your mutual fund investments over a period of time into fixed monthly installments. You, thus, invest small sums of money to buy MF units at regular intervals to achieve your financial goals.

What are the benefits?

Systematic Investment Plans help you invest in mutual funds in a disciplined manner. It not only helps you tap into the advantages of mutual funds, but also makes the whole process easy.

Here are some benefits of SIP investments:

  • Discipline: The biggest advantage of the SIP is that your investments are disciplined. Since the process is automated, you never miss a single investment. This enables you to meet your financial goals.
  • Easy: It only takes a single registration process to conduct all your investments through SIP. This drastically reduces the amount of time you spend on transactions.
  • Timing: Through SIP, you cannot go wrong with the timing of investments. This is because you are investing irrespective of the market timing.
  • Cost averaging: The principle of rupee-cost enables you to lower the average cost of investment. This is because you will be investing a fixed amount every month. So, during different market cycles, you buy varying amounts of MF units. So, on the whole, the average cost falls.
  • Power of compounding: It is always advisable to start investing as early as possible. This helps you earn more profits through continuous reinvestment. This helps you earn interest even on your profits. As a result, the total profit you earn is much higher. This is called the power of compounding. SIP helps you tap into the power of compounding.
  • Small investors: SIPs can be started even with the small amount of Rs 500 or Rs 1000.
Why SIP?
  • Disciplined approach towards investing
  • Avoid wrong investment timing
  • Power of compounding
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How to place an SIP request?

SIP request can be placed only in those mutual fund schemes which offer an SIP facility.

Here are the steps:

  • Go to www.kotaksecurities.com > Login to your account > Place order > Mutual fund > SIP.
  • Fill in details about the scheme.
  • Click the 'place order' button.
  • Then, enter details about SIP amount, duration and frequency.
  • Accept the mutual fund’s terms & conditions.
  • An order acknowledgement page appears displaying order number. Please save the order number for tracking the order status and the click on ‘Ok’.

+ Expand AllFrequently Asked Questions (FAQs)

  • Q Do I need to have enough funds when I place the order?

    Unlike a purchase order, you can place an SIP request even though you have insufficient funds in your Mutual funds ledger with Kotak Securities at this stage. But you should ensure that sufficient funds are available on every due date by cut-off time, else your SIP investment will be skipped for that month/due date.
  • Q Is there any penalty if an SIP installment is skipped?

    As of now there is no penalty.