A Guide To Investing In Sbi Mutual Fund Sips

Investing in mutual funds can be done in two ways: through a lump-sum investment or a Systematic Investment Plan (SIP). A SIP is a facility offered by mutual funds that allows investors to invest a fixed amount of money at pre-defined intervals in a selected mutual fund scheme. SBI offers Systematic Investment Plans (SIPs) that allow investors to invest in various mutual fund schemes across equity, debt, hybrid, and other categories.

SBI SIPs offer a convenient, flexible, and disciplined approach to investing in market-linked funds, catering to various risk profiles and investment goals. With SBI SIPs, investors can choose how much and how often they invest, starting with a minimum amount of Rs. 500. The plans also provide the benefit of rupee-cost averaging, leveraging the power of compounding, and promoting disciplined investing habits.

To invest in an SBI SIP, individuals can utilise the official website of the fund house, a distributor, or an online investment platform. The process typically involves registering, selecting the desired SIP plan, choosing the investment type and amount, providing necessary details, and setting up a mandate for automated payments.

SBI SIP plans: how to choose the right one for you

SBI SIP plans are a great way to invest in market-linked funds in a disciplined and convenient manner. Here are some tips to help you choose the right SBI SIP plan for your financial goals:

Understand Your Financial Goals

Before choosing an SBI SIP plan, it's important to identify your financial objectives. Are you saving for retirement, a child's education, or perhaps building a corpus for the future? Different SBI SIP plans cater to various goals, so understanding your specific goal will help you make the right choice.

Assess Your Risk Appetite

SBI SIP plans offer a range of options, from equity funds to debt funds and hybrid funds. Each type of fund carries a different level of risk. Equity funds, for instance, are considered riskier but offer higher returns, while debt funds are generally less risky but with lower returns. Evaluate your risk tolerance and choose a plan that aligns with your comfort level.

Consider Your Investment Horizon

The investment horizon refers to how long you plan to invest for. SBI SIP plans can be tailored to different timeframes, from short-term investments of a few years to long-term investments spanning decades. If you're saving for retirement, for example, you'd typically choose a longer investment horizon.

Evaluate the Track Record

When selecting an SBI SIP plan, it's essential to look at the fund's past performance and consistency. While past performance doesn't guarantee future results, it gives you an idea of how the fund has fared over time. Check the fund's returns over the last few years, and compare it with similar funds to get a sense of its track record.

Determine the Investment Amount

Different SBI SIP plans have varying minimum investment requirements. Some plans allow you to start with as little as ₹500, while others may require a higher initial investment. Assess your financial situation and decide on an investment amount that fits comfortably within your budget.

Flexibility and Control

SBI SIP plans offer flexibility in terms of investment amounts, frequencies, and the ability to modify or pause your investments. Consider your preferences and choose a plan that gives you the level of flexibility and control that you desire.

Seek Expert Advice

If you're new to investing or unsure about which plan to choose, consider seeking advice from a financial advisor. They can help you assess your financial goals, risk tolerance, and provide personalized recommendations based on your circumstances.

Remember, investing in SBI SIP plans is a long-term commitment, and it's important to make an informed decision that aligns with your financial objectives and risk appetite.

How to invest in SBI mutual funds via ET Money

SBI Mutual Fund offers 72 primary schemes, including equity funds, debt schemes, hybrid schemes, and others like gold funds.

To invest in SBI Mutual Funds via ET Money, follow these steps:

• Sign up using your email and OTP.
• Select the fund and enter the investment amount. Choose the investment type: one-time (lumpsum) or SIP.
• Enter your PAN, full name, and verify your mobile number.
• Enter your bank account details and select your payment mode. If you opt for SIP, set up a mandate.
• Follow the KYC process, which includes a selfie and a live video. Provide essential details and eSign.
• The transaction will be processed upon verification of your KYC documents.

The documents required for KYC (Know Your Client) include proof of address and proof of identity. Here is a list of officially valid documents:

• PAN Card (mandatory)
• Any other valid identity card issued by the Central or State Government
• Bank account statement or bank passbook
• Utility bills like electricity or gas bills

ET Money offers a paperless and fast solution by allowing you to submit your KYC in under two minutes. You can upload photos of your identity and address proofs, including PAN and any one of Aadhaar, Voter ID, Driving License, and Passport, along with your signature, a selfie, and a live video for authentication.

It takes about 3-5 working days to get your KYC verified, as the process is carried out by government-certified agencies.

A Systematic Investment Plan (SIP) is a convenient method to invest in mutual funds. It allows you to invest a fixed amount as small as Rs. 100 in a Mutual Fund scheme at regular intervals. You can choose to invest weekly, monthly, quarterly, or annually.

SIPs offer several benefits, including discipline through automated investments, no need to time the market, total flexibility, and the benefit of Rupee Cost Averaging. They are a simple and flexible way to create wealth with small amounts.

SBI SIP plans: how to modify your investment amount or frequency

SBI Systematic Investment Plans (SIPs) are a facility offered by mutual funds to investors to invest in a disciplined manner. SIPs allow investors to put a fixed amount of money, starting from as low as Rs. 500, into a selected mutual fund scheme at pre-defined intervals. These intervals can be weekly, monthly, quarterly, semi-annually, or annually.

Modifying your investment amount

The amount of money you invest in your SBI SIP can be modified at any time. You can increase or decrease the SIP amount by checking your returns with the SIP investment calculator. You can also pause your investments in a SIP for a specified period.

Modifying your investment frequency

The duration of your SBI SIP can be modified by filling in a fresh SIP enrollment form, starting a new SIP online, or through Investap. The minimum tenure for an SBI SIP is three years, but there is no maximum tenure. You can invest for as long as you want.

Top-up SIP

Top-up SIP is a facility that lets you increase your SIP by a fixed amount or percentage (e.g. 10%) every year or at pre-defined intervals in line with an increase in your income or savings. This helps your investments keep up with the increase in the cost of living or inflation and allows you to reach your financial goals earlier or create a larger corpus for your goal.

Flex Systematic Transfer Plan (Flex STP)

Flex STP is a facility that allows investors to take advantage of market movements by investing higher amounts when the markets are low and vice versa. The amount transferred under Flex STP from the source scheme to the target scheme is calculated using a specific formula.

How to cancel an ongoing SBI SIP plan

There are several reasons why investors might want to cancel their SIP plans. Some of the most common reasons for cancelling are:

• Investors might want to withdraw their investments or liquidate the mutual funds if the market fluctuates.
• If the mutual fund you have invested in performs poorly for a long time, you may want to withdraw your money from the investment.
• An investor would want to cancel the SIP if the overall objective of the fund changes, or even if only the asset allocation of the fund changes. Hence, the rate of returns can be negatively impacted.
• There have been several instances where the fund manager changes; hence, the investing pattern of the fund might also change.
• An investor might also want to cancel the SIP if they have any financial emergency and need funds for a task that needs immediate attention.

If you have invested in an SBI mutual fund and wish to liquidate your SIP, you can cancel it easily using two methods: online and offline.

Cancelling an SBI SIP Plan Online

To cancel your SIP online, follow these steps:

• First, visit the SBI Mutual Fund website.
• Scroll down to the "Select Request" tab under the non-financial transaction header.
• Choose "SIP Cancellation Request" from the options.
• Enter your Folio Number and click Proceed.
• After processing your request, SBI bank executives will cancel your SIP, which may take up to 30 days.

Another way to close your SIP online is through an investment agent. You can contact your agent and discuss your account closing request. They will log in to their portals to cancel your SIP mutual fund account.

Cancelling an SBI SIP Plan Offline

If you prefer the offline mode, follow these steps to cancel your SIP:

• If you have a designated asset manager, inform them about your decision to close your SIP. Otherwise, contact your asset management company directly.
• Obtain an appointment form from the transfer agents.
• Fill in the required details on the form, including your bank account information, folio number, SIP scheme name, SIP amount, PAN, and the date from which you want to discontinue the scheme.
• Submit the completed form to your asset manager.
• The cancellation process typically takes about 21 days, but the exact time may vary depending on the fund house.

Before closing your account, it is advisable to check with your asset or portfolio manager about the current status of your funds and any potential hidden costs. While most companies do not charge for cancellation, some may require a processing or transaction fee.

The benefits of investing in SBI SIP plans

SBI SIP plans offer a range of benefits for investors. Here are some of the key advantages:

Disciplined and Worry-Free Investing:

SBI Systematic Investment Plans (SIPs) provide a disciplined approach to investing. Once set up, the amount is automatically deducted from your bank account and invested in your chosen mutual fund, eliminating the need for manual intervention. This helps you stay committed to your investment goals.

Rupee-Cost Averaging:

With SBI SIPs, you buy more units when prices are low and fewer units when prices are high. Over time, you end up paying an average price, balancing out market volatility. This strategy, known as rupee-cost averaging, helps smoothen the impact of market ups and downs.

Power of Compounding:

SBI SIPs allow you to reinvest profits, and your money grows over time. The power of compounding ensures that you earn returns not only on your initial investment but also on the gains made, leading to long-term wealth creation. The earlier you start, the more your wealth can grow.

Flexibility:

SBI SIP plans offer flexibility in terms of investment amount, frequency of contributions (monthly, quarterly, etc.), and tenure. You can also modify the investment amount or frequency after an initial investment period. Additionally, there are no lock-in periods for SBI SIPs, except for tax-saving funds like ELSS, which have a 3-year lock-in.

Choice and Control:

SBI offers a wide range of SIP plans, including equity, debt, hybrid, and other asset classes, catering to different risk appetites and investment goals. You can choose the plan that aligns with your needs and comfort level.

Low Minimum Investment:

SBI SIP plans have a low minimum investment requirement, starting from as little as ₹500 per month. This makes them accessible to a wide range of investors, even those with small savings.

Expert Management:

SBI SIP plans are professionally managed, so you benefit from the knowledge and experience of investment experts. This ensures that your investments are handled in accordance with market trends and best practices.

Frequently asked questions