In today’s word, an investor needs to be extra careful about each fund that they tend to invest their money in, for future gains. Mutual fund investments are no exception. If you are wondering how to invest in mutual funds every month, this article will work as a mutual fund investment guide for the same.
What is SIP?
Systematic Investment Plan (SIP) is a facility offered by various mutual fund houses and AMCs (asset management company) to invest in mutual funds in a disciplined manner. To inculcate the habit of regular saving and investing, it makes sense to set aside small amounts to be invested regularly. This allows investors to manage their daily expenses while creating a decent and significant investment corpus for their future needs. Under an SIP investment, an investor invests a specific amount for a fixed period of time at regular intervals. The periodicity of the intervals can be daily, weekly, monthly, quarterly, semi-annually or annually. One of the most common periodicities among investors in monthly SIP investment plans.
Before you commence your financial journey and invest in mutual funds, you have to do some basic homework. Firstly, you should evaluate why do you actually wish to invest? This will help you to identify your financial goals and objectives. Next, define the timeframe in which you wish to achieve these financial goals. This will help you to recognise your investment horizon. Lastly, find out how much risk you are willing to undergo to achieve these goals. This will help you determine your risk profile.
How to start investing in mutual funds on a monthly basis?
As an investor, you have two option to invest in mutual funds – the online way or the traditional offline method. Let’s understand both these methods in brief:
How to invest in mutual funds online?
You can invest in mutual funds online through the websites of respective mutual fund housesorthrough their mobile apps. Further, you can also invest in mutual funds directly through the CAMS (computer age management services) website, a mutual fund transfer agency registered with the Association of Mutual Funds in India (AMFI). This investment option is ideal if you are well-versed with mutual funds. This essentially means that you are taking care of your finances and your funds without the help of any third-party.
How to invest in mutual funds offline?
To invest in mutual funds the offline way, you need to submit a duly filled application form along with a bank draft or a cheque. You can send this application form to the registrars such as CAMS or the respective Asset Management Company (AMC) or designated Investor Services Centres (ISC) along with the necessary documents. This is known as the offline method of investing in mutual funds. Alternatively, you can even invest through your bank if they offer such services.
Irrespective of the types of mutual funds you decide to invest in, ensure that it aligns with your investment portfolio. Happy investing!