The ultimate guide for starting your first SIP investment

The ultimate guide for starting your first SIP investment


Just like a recurring deposit, an SIP (systematic investment plan) is an investment route through which you can invest a predetermined amount at periodic intervals to purchase mutual fund units. Doing so encourages the habit of financial discipline. Also, with an SIP investment, you can derive the benefit of rupee cost averaging and compounding effect only if you stay invested in an equity mutual fund over the long run.

So, the SIP is a prudent mode to attain your long-term life goals with small mutual fund investment over the investment time frame. Here’s a guide to help you begin your SIP investment journey –

Step no. 1 – Complete all your KYC (know your customer) formalities

To begin your mutual fund investment through an SIP, you must become KYC compliant.

For this, you must arrange all the required documents. These documents include –

·       PAN

·       Address proof (passport, voter ID, Aadhaar, driving license, etc.)

·       Cheque book

·       Passport sized photos

Once you have all the documents handy, start with the KYC process. Visit the website of the fund house that provides an eKYC facility. Here, you must input basic details like your name, birth date, contact details, etc. Upload all the necessary documents to support the information provided. Next, you must complete the in-person authentication. For this, schedule a video call appointment and verify all the details.

Once you become KYC compliant, you can start investing in mutual funds through the SIP mode.

Step no. 2 – Register for the mutual fund SIP

Your focus now must be to register for the mutual fund SIP of your preference. First, approach the fund house that offers the mutual fund of your choice. Look for the link to register yourself. Once you find this link, fill out the application form.

After this, create a user ID and passcode to conduct your transactions online. Provide your bank account details from which your payment towards the SIP mode will be deducted automatically. Once your registration process is complete, you will receive a confirmation email. Post receiving this email, you can begin with your mutual fund investment.

Step no. 3 – Choose the preferred mutual fund scheme to begin your SIP investment

You must choose the best mutual fund as per your risk appetite level, financial goal, and investment horizon. For long-term financial goals, consider investing in an equity mutual fund scheme as equity has the potential to beat inflation and returns on fixed-income securities by a wide margin over the long term. To meet your short-term goals like purchasing a 4-wheeler, planning a trip abroad, etc. consider investing in a debt mutual fund through an SIP. Doing so would allow you to safeguard your capital while generating satisfactory returns.


So, in case you have not started your investment in a mutual fund through the SIP mode, start today. Beginning now with a smaller investible surplus would allow you to earn higher returns in the long run. Also, note that to estimate your monthly investment towards an SIP to obtain a specific financial goal, you may use an online SIP calculator.

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