How to invest in SIPs(Systematic Investment Plan)
The new financial year has started and many investors would be thinking of starting new investments. If you are planning to invest in mutual funds, SIPs are one of the best way to invest. Many people, who want to start investing in Systematic Investment Plan (SIP) in an equity mutual fund scheme, dread the paper (and leg) work. Well, you don’t have to deal with papers. Just switch on the computer and you can start an SIP online from your home or office.
The first thing you need to do before starting an SIP is fulfilling the Know Your Customer (KYC) requirement. KYC is a must to invest in mutual funds. You will have to submit an identity proof, address proof and a photograph. You should also confirm your physical existence through an In-Person Verification or (IPV).
You can complete all these requirements electronically through eKYC. Most fund houses like Birla Sun Life, Quantum, etc have started providing this facility through their website. You simply have to click on the ekyc link and follow the steps.
Alternatively, you can also visit CAMS KRA online, a KYC registration agency. It is a centralised and a onetime procedure. You don’t have to fulfil it separately with each and every fund house you wish to invest. CAMS is not the registrar and transfer agent for every mutual fund, some mutual funds are taken care by Karvy. So you must check who services the fund of your choice.
The exact steps for eKYC differ slightly with every fund house. However, broadly the structure remains the same.
Basic Information: The system would first prompt you to give all the personal information in an online form. It would include name, date of birth, mobile number, address,etc.
Upload Documents: In the next step, you will have to upload a scanned copy of your PAN (Permanent Account Number) card and an address proof.
Video Call: To complete the IPV (In-Person Verification) requirement the fund house will ask you to select a suitable time slot at which you can confirm your physical existence through a webcam. Keep your original PAN card and address proof handy as you will be asked to show them during the video call.
Aadhar based eKYC
Having an AADHAR would simplify the above procedure. Entering your AADHAR number and authenticating it with an OTP (One-Time Password) sent by UIDAI will pre-populate the form with all your basic details available in the UIDAI database. Completing the ekyc procedure through AADHAR doesn’t require IPV through a video call.
UIDAI database already has your biometric information. But, there is a statutory limitation which won’t allow you to invest more than Rs 50,000 in a financial year if you haven’t submitted your PAN details. The limit can be enhanced anytime by submitting PAN.
The final step
Now, visit the website of the fund house and search for the registration link for a new account. This is usually located below the login button. It will direct you to a simple form for creating an online transaction account with the fund house.
Keep your cheque book and cell phone handy as you would be required to enter your bank details and might have to verify your account through an OTP.
Once you have created the account, simply login, select the mutual fund scheme, chose an SIP date and submit your request. Congratulations, you just started your SIP.