Systematic investment plan or SIP is a way of investing a fixed sum at regular intervals in a mutual fund. It offers stability in terms of investment and financial planning in the long run.
In case of SIP, investors can hold the eligible mutual fund units in dematerialised form. It can also hold shares bonds and other assets.
Demat account is not required for most of the mutual fund sip. Mutual fund units are typically held in statement of account form or demat form. Investors may choose whichever way they prefer.
What Is Demat Account for SIP?
The Demat account is used to hold the investments in electronic format.
If mutual fund units are in demat form than investors can see them along with other securities in one account. This makes it easy to follow.
Many demat apps also offer a single dashboard to view your holdings, transactions and portfolio value.
How to start SIP using Demat platform
The process is simple and involves a few steps.
1. Demat Account Open
Choose a registered broker or depository participant. “Open the account. Go on.
You may have to furnish PAN, identity proof, address proof and bank details.
2.Finish KYC
KYC is a must for investing in mutual funds. Provide the necessary information and documentation.
The platform might also need bank verification.
3. Select a Mutual Fund
Choose a mutual fund on the basis of your financial goal and risk appetite.
Before you invest – look at the fund’s goal, asset class, costs and risks.
4. Calculate SIP Values
Choose a monthly amount that works for you and your budget.
For example, an investor can think of a SIP of ₹5,000 a month with a long term goal.
5. Click the SIP Date
Select a date for the recurring investment.
Dates available will vary between platforms and schemes.
6. Enable Auto-Debit
Connect your bank account and approve the payment mandate.
Once the mandate is active, the SIP amount can be debited on the date of your choice.
7. Track your investments
See your mutual fund units, transaction history and portfolio value on the platform.
Many demat apps show stocks and other holdings at one place.
The ways SIPs can help you in long-term planning
How SIPs Help with Long-Term Planning
Instead of investing a large sum of money all at once, investors can invest smaller amounts regularly.
The number of units you purchase in the mutual fund will be based on the applicable Net Asset Value (NAV). With the NAV going up and down, each SIP installment may get you a different number of units.
SIPs can also be related to goals like retirement, education or future fund.
But returns of mutual funds depend on the market condition. There are no guarantyd or set returns.
Investors need to watch their SIPs from time to time Changes to the investment plan may be necessary if income, goals or risk level change.
Bajaj Broking for SIP Investments
Bajaj Broking’s digital platform for mutual fund investment.
Its website says investors can choose from over 4,000 mutual fund schemes. SIP investments in select schemes can start as low as Rs 100.
The platform also features a SIP calculator. This calculator can help investors understand what their regular investments could be worth over a time period that you choose.
Bajaj Broking is one of the platforms available for investors looking for a demat account for SIP with access to stocks, IPOs and other market products.
Investors should read the charges, scheme details and risk factors before investing.
Conclusion
The SIP demat account allows investors to hold the eligible mutual fund units and other securities in a single digital account.
This is not required for most mutual fund SIPs but can help you to track easily via demat apps.
You need to open an account, complete KYC, select a fund, decide the SIP amount and activate auto payments.
With regular investments, periodic reviews and clear goals, you can ensure that your SIP plan stays aligned to your long-term financial needs.
Sources
- AMFI – Systematic Investment Plan
https://www.amfiindia.com/investor/become-mf-distributor?zoneName=sip - AMFI – Myths and Facts About Mutual Funds
https://www.amfiindia.com/investor/knowledge-center-info?zoneName=MythsAndFactsAboutMutualFunds - NSDL – Demat Option for Mutual Fund Units Through SIP
https://nsdl.co.in/downloadables/pdf/2012-0021-Policy-Demat-option-for-Mutual-Fund-units-through-Systematic-Investment-Plan-%28SIP%29-SIGNED.pdf - Bajaj Broking – Mutual Funds
https://www.bajajbroking.in/mutual-funds - Bajaj Broking – SIP Calculator
https://www.bajajbroking.in/calculators/sip-calculator
