Here are some Frequently Asked Questions about SIPs in Mutual Funds. If you have any additional ones, please feel free to ask below:
What is a SIP ?
A SIP or Systematic Investment Plan is process of investing your money via monthly savings in Mutual Funds. If you want to save and invest Rs 5000 regularly per month, then you can do so easily and automatically via a SIP of Rs 5000 ( or 2 SIPs of Rs 2500 each )
What is the minimum amount one can invest ?
You can start from as low as Rs 1000 per month and increase as you wish. There is no upper limit for a SIP and it all depends on what your monthly savings are like and how much you would like to invest.
Where does my money go ?
After your SIP is initiated, your money is directly debited from your bank account via an ECS Mandate and sent to the Mutual Fund of your choice.
How long do I have to invest for ?
You can invest in a SIP for a minimum of 6 months and continue as long as you like. You can also withdraw your money anytime you wish if it’s invested in open ended mutual funds
What are the returns or How much can my money grow ?
If you invest in Equity Funds, you can expect pretty good inflation beating annual returns ( between 12.5 to 15% per annum ) provided you stay invested for a long period of time( atleast > 5 years and upwards).
How do I monitor my portfolio ?
You will receive a login id and password to your online portfolio on our website. You can also see it on your phone via an Android App.
What are the charges for starting a SIP ?
There are no charges for starting SIPs in Mutual Funds.
Are there any recurring costs ?
No, there are no recurring charges.
When can I withdraw my money ?
You can withdraw the money anytime you wish. However, in some funds, if you withdraw it before 12- 18 months, there is an exit charge of 1% on the amount you have invested which is levied by the Mutual Fund company. Tax Saving or ELSS funds have a lock in period of 3 years before you can withdraw your money.
Will the money I earn be taxed ?
If you invest in Equity funds, all your earnings after 1 year will be taxed at Long Term Capital Gain rates. If you invest in Debt Funds, after 3 years you can get indexation benefit which significantly reduces taxes on your earnings.
How does the online platform work ?
First, you enter your details to create an account – Send in your signed application to activate your account – Start investing through our online platform – Monitor your portfolio and sell your funds anytime you wish, online.We also have a free service to help you with fund selection incase you need help with getting started.
Why do you need my PAN and Bank Account numbers ?
The Government of India requires that all Mutual Fund investors need to quote a PAN number for making investments.We require your bank account number to get an approval mandate from your bank so that you can make automated monthly investments (also called SIPs) in Mutual Funds. Note: All your investments will be transferred to and from the bank account that you provide online.
How long does it take for the account to be activated ?
After you provide your details, you will receive your login id and password via email. You will need to send us a signed application form for verification and processing. The entire process takes about 1 – 2 weeks.
Why do I need to send a paper form ? Can’t it be done online?
The Government of India rules require that all investors need to be KYC verified. To do that, we will need physically signed application form from you along with supporting id and address proofs. Note: This is a one time process only and after your verification, all buying and selling of funds will happen online.
How do I know my money is safe and invested with the mutual fund company ?
Good question. We use the www.fundsindiaadvisor.com technology platform to power our website. It’s currently being used by over 800,000+ clients.You can also visit the CAMS (a third party registrar’s ) website to request an email statement of all your investments as proof that your investments have indeed been made in the desired mutual fund companies.
How are you different from other online websites ?
The biggest challenge most investors (especially first time investors) face is to determine how much money to invest and which funds to invest their money in.We provide a guidance and advisory service which enables you to invest in the most suitable funds for your requirements.
How do you make money?
We don’t charge our clients because we are paid a transaction fee by the mutual fund companies for providing an online investment platform which facilitates investments into their mutual funds by clients.E.g. If you invest Rs 10,000, we will be paid a small percentage of investment amount, which ranges between 0.2 to 0.5% or about Rs 50 by the mutual fund companies.
This is paid out of the overall Expense Ratio of the Mutual Fund and you don’t have to pay anything extra.
How do I know there is no conflict-of-interest? Or How do I know that you won’t recommend funds in which you will get the maximum commissions ?
Very good question. Firstly, we provide a free online platform and you have complete freedom to choose the funds you want to invest in. If you know the funds you want to invest, you can do so and there is no conflict-of-interestOur advisory and guidance service is optional and we only recommend the best funds which can be validated by doing some extra research at 3rd party sites like Moneycontrol.com, Valuresearchonline.com, CRISIL etc
More importantly, the quantum of fees paid by the top mutual fund companies is almost similar so we have no particular incentive to recommend one fund over another.
Are you registered with SEBI ?
We are a distribution platform and hence don’t need to registered with SEBI. However, we are required to be registered with the industry body AMFI – Our ARN is 109033
Why do I get an email from FundsIndiaAdvisor.com ?
FundsIndiaAdvisor.com provides a technology platform which we use as our back end office for processing transactions. It is the same technology which powers fundsindia.com and is used by lakhs of users in India.
Have more questions ? Feel Free to ask us here >>