Mutual Fund SIP, Systematic Investment Plan FAQs (2024)

How do I start an SIP

You can start hassle free SIP by without giving multiple post dated cheques by giving one time instruction to debit your bank account using ECS / Auto Debit instruction for payment of SIP transaction.

Your account will be automatically debited every month or quarter as opted by you and the proceeds will be utilized for allotment of units of the mutual fund scheme of your choice.

To avail of this facility, all you have to provide is

  • Duly filled & Signed application form
  • Complete and sign the SIP registration cum ECS / Auto Debit mandate Form (Form should be duly signed by all applicants and as per the signatures made available to the bank (as in bank records) through which you wish to opt for debit.)
  • Cheque for first SIP investment or Cancelled cheque or Copy of the cheque
  • Submit the same at the nearest AMC branch.

What is the Minimum Investment amount for investing in SIP?

The minimum SIP amount (Per Installment) in case of Monthly/Quarterly SIP option will be as follows:

SIP FrequencyMonthlyMonthlyQuarterlyQuarterly
Minimum SIP amount (Rs.)500100010001500
Minimum Number of Installments12664

What will be the default frequency for SIP if nothing is specified in the Application Form?

If you have not specified the frequency for SIP in the Application form the default frequency would be Monthly.

What is Perpetual SIP?

If you do not specify the SIP end date in the Application form or if the SIP date is unclear then the SIP will be treated as Perpetual i.e. it will be continued till December 2099.

Can I register for multiple SIPs in the same scheme?

Yes, you can register for multiple SIPs in the same scheme same plan in the same month however on different dates. However, you need to submit separate ECS/Auto Debit Mandate forms to register for multiple SIPs in the same scheme same plan.

In which locations is the SIP ECS /Auto debit facility available?

SIP Payment through Electronic Clearing System (ECS) facility will be available in the selected cities, if your bank account is with any bank & branch which participates in local clearing in following cities/locations, you can avail SIP Auto Debit Facility

BarodaCoimbatoreHassan*KolhapurNew DelhiSiliguri

*The first transaction should be demand draft drawn on the city where the application is submitted.

(Please note that the list of cities may be modified/updated/changed/removed at any time in future at the discretion of the RBI/Local Clearing Centre/AMC without assigning any reasons or prior notice. If the SIP auto debit facility is discontinued in a city for any reason, SIP instructions for investors in such city via ECS (Debit) route/Direct debit/SI may be discontinued without prior notice.)

Apart from these cities, Regional Electronic Clearing System (RECS) facility is available in 5 States - Tamil Nadu, Karnataka, Andhra Pradesh, Rajasthan and West Bengal (for West Bengal, Sikkim, Andaman & Nicobar Islands).

If you are having bank accounts with banks having Core Banking Solutions and participating in the RECS may also enroll for SIP facility. Non-core banking bankers such as Co-operative Banks and Post Office Banks will not able to participate in RECS.

If your bank branch is not located in ECS Debit locations however, if you have a core banking account with any of the banks mentioned below, you can avail SIP Auto Debit Facility, irrespective of the location.

Allahabad BankAXIS BankBank of Baroda
Citi BankCorporation BankFederal Bank
HDFC Bank LtdICICI BankIDBI Bank Ltd
Karnataka BankPunjab National BankState Bank of India
Union Bank of IndiaUnited Bank of India

How can I cancel an existing SIP in the folio?

Yes, for doing so you need todownload the formand complete the same and sign as per the mode of holding and send the same to the nearest TMF branch / registrar service centre 15 days prior to the next SIP date. However it should be noted that In case of three consecutive failures due to insufficient balance in bank account while processing request for SIP the SIP will get automatically terminated without any written request from your side.

What is Micro SIP?

“Micro SIP” mean Systematic Investment Plans (SIPs) where aggregate of installments in a rolling 12 month period or in a financial year i.e. April to March does not exceed Rs 50,000.

Which category of investors can invest in Micro SIP?

In MICRO SIP, Individuals (including joint holders who are individuals, NRIs but not PIOs, MINORs and Sole Proprietory firms) can apply.

What is the maximum investment amount available for MICRO SIP?

For MICRO SIP maximum SIP amount can be Rs.4000/- per month or Rs.12000/- per quarter.

Is KYC mandatory for investors investing through Micro SIP?

Yes. Investors who wish to enroll for a Micro SIP are also required to complete KYC formalities. In lieu of PAN, applicants will have to submit a valid proof of identity, any one of the following PHOTO INDENTIFICATION document can be submitted:

  • Voter Identity Card
  • Driving License
  • Government / Defense identification card
  • Passport
  • Photo Ration Card
  • Photo Debit Card (Credit card not included because it may not be backed up by a bank account).
  • Employee ID cards issued by companies registered with Registrar of Companies)
  • Photo Identification issued by Bank Managers of Scheduled Commercial Banks / Gazetted Officer / Elected Representatives to the Legislative Assembly / Parliament
  • ID card issued to employees of Scheduled Commercial / State / District Co-operative Banks.
  • Senior Citizen / Freedom Fighter ID card issued by Government.
  • Cards issued by Universities / deemed Universities or institutes under statutes like ICAI, ICWA, ICSI.
  • Permanent Retirement Account No (PRAN) card isssued to New Pension System (NPS) subscribers by CRA (NSDL).
  • Any other photo ID card issued by Central Government / State Governments /Municipal authorities / Government organizations like ESIC / EPFO.

As a seasoned expert and enthusiast in the field of mutual fund investments and Systematic Investment Plans (SIPs), I have a wealth of knowledge and hands-on experience to guide you through the intricacies of starting and managing your SIP portfolio. Let's delve into the key concepts mentioned in the provided article.

1. Starting an SIP:

To initiate a hassle-free SIP, you can provide a one-time instruction to debit your bank account using ECS/Auto Debit. This involves completing and signing the SIP registration cum ECS/Auto Debit mandate form, along with submitting a cheque for the first SIP investment or a cancelled cheque.

2. Minimum Investment Amount:

The minimum SIP amount per installment varies based on the frequency (monthly or quarterly) and ranges from Rs. 500 to Rs. 1500. The minimum number of installments also depends on the chosen frequency.

3. Default Frequency:

If you don't specify the SIP frequency in the application form, the default frequency will be monthly.

4. Perpetual SIP:

If you don't specify the SIP end date or if the SIP date is unclear, the SIP will be treated as Perpetual and will continue until December 2099.

5. Multiple SIP Registrations:

You can register for multiple SIPs in the same scheme and plan in the same month but on different dates. Separate ECS/Auto Debit mandate forms are required for each registration.

6. SIP ECS/Auto Debit Facility Locations:

SIP payment through ECS is available in specific cities, and the list may be subject to modifications. Additionally, Regional Electronic Clearing System (RECS) is available in five states.

7. Canceling an Existing SIP:

You can cancel an existing SIP by downloading the form, completing it, signing as per the mode of holding, and sending it to the nearest TMF branch or registrar service centre 15 days prior to the next SIP date.

8. Micro SIP:

"Micro SIP" refers to SIPs where the aggregate of installments in a rolling 12-month period or a financial year does not exceed Rs. 50,000. Individuals, including joint holders, NRIs (excluding PIOs), minors, and sole proprietorship firms, can invest in Micro SIP.

9. Maximum Investment Amount for Micro SIP:

The maximum SIP amount for Micro SIP is Rs. 4,000 per month or Rs. 12,000 per quarter.

10. KYC Requirements for Micro SIP:

KYC is mandatory for investors in Micro SIP. Applicants need to submit a valid proof of identity, such as a Voter ID, Driving License, Passport, or other recognized identification documents.

This comprehensive understanding of SIPs and related concepts should equip you with the necessary knowledge to navigate the world of mutual fund investments effectively.

Mutual Fund SIP, Systematic Investment Plan FAQs (2024)
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