A Beginner's Guide To Investing In Sip With Icici Direct

Investing in a Systematic Investment Plan (SIP) with ICICI Direct is a great way to enter the stock market without worrying about the timing of your investments. SIPs are a safe method of investment that allows you to start with a small amount of money, which can be as little as Rs. 100 per month, and invest at regular intervals (weekly, monthly, or quarterly). This helps you build the habit of saving and, with the help of the SIP calculator, you can determine a suitable investment amount to achieve your financial goals. ICICI Direct offers several benefits, including a strong legacy, a wide range of products and services, an award-winning research team, and online investor education.

How to start a SIP online

SIP stands for Systematic Investment Plan, which is a route into the stock market without the worry of timing the investment. It is a disciplined way to save, as a fixed amount is put aside at regular intervals.

To start a SIP online, you will need to:

Find an online investing platform

There are many online investing platforms, so it is worth doing some research to find the right one for you. You can use the ICICI Direct website, which has a user-friendly interface and offers a range of investment options.

Create an account

You will need to fill in all the necessary details and complete the KYC (Know Your Customer) formalities.

Choose your funds

Once you have an account, you can choose the funds you want to start your SIP with. You can use the ICICI Direct SIP calculator to determine a suitable SIP amount and understand the impact of the holding period. This will help you make an informed decision about your investments.

Register for a new account

After selecting the SIP you want, click on 'register now' and fill in the application form. You will need to provide a username and password for your online transactions and give the details of the bank account from which the SIP payments will be debited.

Choose your scheme

After the registration process, you can select the scheme you like. The investment will start after the fund house sends a confirmation, and the SIPs generally begin after 35-40 days.

Start investing!

With ICICI Direct, you can benefit from regular investments and compounded returns with SIPs. You can also take advantage of detailed portfolio analysis and reviews, and a proven track record of higher returns.

There are no guidelines or restrictions for starting an SIP, and you can do it at any time in an open-ended mutual fund scheme. It is a safe method of investment, as you do not need to time the market.

Benefits of investing through SIP

Investing through a Systematic Investment Plan (SIP) offers a range of benefits to investors:

Simplicity and Flexibility

SIP allows investors to start with small amounts, such as Rs 500 each month, and watch their investments grow. It is a simple and convenient way to track and save money. SIPs are open-ended funds, meaning investors can withdraw the full or partial amount from their investment without incurring any losses. The investment amount can also be adjusted as needed.

Rupee Cost Averaging

A unique feature of SIP is Rupee Cost Averaging, where investors buy more units when the market is low and fewer when the market is high. This inherent feature helps to reduce the overall cost of investment and leads to higher gains over time.

Double the Returns

SIP provides double the returns compared to traditional fixed or recurring deposits, helping investors beat inflated costs.

Power of Compounding

SIP operates on the principle of compound interest, meaning a small amount invested for a long period can yield better returns than a one-time investment.

Emergency Fund

As SIPs are open-ended funds without a fixed tenor, investors can withdraw their SIP investment as a contingent fund whenever needed.

Protection from Market Volatility

SIPs protect investments from potential market crashes. Unlike one-time investments, which can result in significant losses if the market crashes, SIPs average out the purchase cost of mutual fund schemes over time. This means investors are not paying an overvalued price for the mutual fund.

No Market Timing Required

With SIP, there is no need to time the market. Investors can buy mutual funds at varied prices, and the cost averages out over the long term. This eliminates the need to actively track the market and helps distribute investments over a period of time.

How to place a Stock SIP

To place a Stock SIP, you can follow these steps:

Go to the ICICI Direct website or app:

• On the website, log in and select "Stocks" from the menu. Then, choose "Smart Tools" and "Stock SIP".
• On the app, go to "Tools" and select "Stock SIP" under the "Stocks" section.

Choose a company and specify the details of your investment:

• You will see a list of available Stock SIPs under the "All Stocks & ETFs" and "Nifty 50 Stocks" tabs.
• Select any company of your choice to invest in.
• Specify the Exchange, Stock SIP Type (either "Quantity" or "Amount"), Frequency or Duration, and the SIP Date.

Place your order:

• Agree to the terms and conditions.
• Your order will be placed successfully, and you can choose to place another order or view your SIP order by selecting "View SIP Book".

You can also place a Stock SIP by going to the "Place Order" screen and choosing "Stock SIP". Here, you will need to fill in key details such as the stock name, Stock SIP Type, Exchange, and duration.

Additionally, ICICI Direct provides resources such as videos and articles to help you learn more about placing and managing Stock SIP orders on their platform.

How to use the ICICI Direct SIP calculator

To use the ICICI Direct SIP calculator, follow these steps:

• Run a quick online search for the ICICI Direct website.
• Look for the 'Calculators' tab on the home page and select the financial calculator SIP from the various options displayed on your screen.
• Enter the SIP contribution you would like to make every month. You can use the slider to enter any amount within the range of 0 to Rs 10 lakh.
• Set the expected return rate at which you would expect your Mutual Fund investment to reap returns. Note that the expected rate is subject to change, and there is no guarantee of the returns you will reap. It is recommended to have realistic expectations from your investments. Here, you can also use the slider to set the expected return rate anywhere between 0 to 15%.
• Next, you need to set your tenure of investment. There are no set rules for Mutual Fund investment tenure. You can invest for any tenure you wish to. The general advice is to stay invested for a longer time to maximise returns. The calculator allows you to calculate returns for any tenure between 0 to 15 years.
• Once you have entered all the necessary variables, the tool will take a couple of minutes to process all the data. It will then provide you with accurate results.
• The calculator typically reflects the total maturity value at first, which is the addition of your principal investment and returns. This will give you a fair idea of the value the investment offers.
• There will also be a pie chart, giving you a graphical representation of your investment returns. The principal amount and estimated returns will be shown in contrasting colours for a clear understanding.
• Now, if you wish to make changes to your investment variables, be it to the monthly contribution or tenure, you can easily do so using the sliders. This feature of the SIP calculator allows you to consider various variations and make an investment that's best suited for you.
• Even the slightest change made to the investment variables will reflect immediately in the total maturity figure and its graphical representation.

The ICICI SIP calculator is a mutual fund SIP calculator that helps complete complex financial calculations quickly. It is designed to give a reasonable estimate of the returns on your mutual fund investments. However, the actual returns of the mutual funds may differ.

How to invest in SIP online

SIP stands for Systematic Investment Plan, wherein the investor sets aside a particular amount for investing continuously at regular intervals. Investors can set the frequency of the investment as weekly, monthly, or quarterly, depending on their preference.

To start investing in SIP online, follow these steps:

• Visit the website of a particular fund house, complete the KYC procedure, and select the SIP you want.
• Click on 'register now' and fill out the application form. Provide a username and password for your online transactions.
• Provide details of the specific bank account from which the SIP payments will be debited regularly.
• After registration, select the scheme you like.
• The investment starts after the fund house sends a confirmation, and the SIPs generally begin after 35-40 days.

It is recommended to use the SIP calculator to determine the right amount to start a SIP. You should choose an amount that you can invest regularly without stopping your investments.

ICICI Direct offers various benefits for investing in mutual funds, including one-click investments in top-performing MFs, detailed portfolio analysis and review, and a proven track record of higher returns.

Frequently asked questions