What are the main steps to open a SIP account for mutual fund investing in India?
Step 1: KYC is very important to invest in Mutual funds. Complete your KYC requirement by submitting a KYC form to the Mutual Fund company.
The document required to open a SIP Account are:-
- KYC application form
- A Pan card (as a identity proof)
- A cancelled cheque
- Address proof ( Voter id Card ,Passport, Aadhar Card)
Step 2: After completed this term submit the application forms (Common application form, SIP enrolment form and an auto debit form) to the nearest mutual fund company office where you want to make an investment.
There are some Points you must focus on that :-
- Regularly watch your investment and compare the performance with good performing Funds and plane to change as when required.
- Analyze the fund’s when you selected any Fund for investment If you find any issue regarded do not hesitate to take advise of an investment expert.
- Split the investment in different Mutual Funds with focus on different assets like equity,debt etc.as your risk appetite and return expectation diversification would ensure good returns despite fluctuation in the market.
What is mutual fund?
Fund collected from many investors create Mutual Fund. A fund manager decides where and how to invest fund. The fund invested in different securities such as bonds, stocks money market instruments etc. The biggest profit in Mutual Fund is that if investor doesn’t know about the Stock Market. He can leave their investment to the experts hands. Where how or when do investment that managed by a professional fund managers.
- Mutual funds gives offer a investment opportunity to the investors who have a limited capital.
- Mutual fund has a potential to give higher returns on medium or long term investment.
- The Company Fund Manager give regular information about the value of investment with their strategy.
there are 5 types of Mutual Funds in india that are as follow:
- Equity Fund– Equity fund is that fund which funds gathered from investors and invested in equities. It is high risk schemes. These type of schemes is suitable for those investors who have risk appetite and can cope any lose.
- Debt Fund- Debt mutual funds invest their money in corporate bonds, government securities etc. This type of mutual funds suitable for those investors who don’t want any risk.
- Balance Fund– In balance Fund Company invested investors fund both in Equity and Debt. The Company invested fund in stock market. It main focus is to earn maximum money and can give return to the investors.
- Money Market Mutual Fund– Money market Fund also know as liquid Fund. Company invests funds safely in short term schemes like certificate of Deposit, treasury and commercial paper etc. This type of investment is for short period.
- Gilt Fund– Company invested investors Fund in government securities and this is suitable for risk averse investors. So it is the safest mutual fund.