How to invest in SIP For Beginners- 8 proven Steps

Everyone dreams of financial planning and in fact, there are numerous ways to build a financially independent path but not everyone has the right guide on how to invest in SIP. So, today I will take you through one of the most popular investing ways, having the potential to make you financially stable. SIPs investment or Simple Investment Plan(SIP). SIP is an investment method where investors like you invest a fixed amount of money at regular intervals, typically monthly, quarterly, or annually, into mutual funds.

The approach of SIP investment by the investor has the potential to gradually accumulate wealth over the period by purchasing a unit of a chosen investment plan at a specific price point. It is often known by the scheme where money is invested periodically over time such as a month or quarter without any type of disruption.

Data Analysis: As per the reports, more than 8.76 million SIP accounts are active in Indian Mutual funds where the Investor regularly Invests in the Indian Mutual Fund Scheme.

So, if you are a beginner and searching for reliable information on how to invest in SIP, then this piece of content might help you remove all the doubts about SIP investment for beginners. SIP for beginners requires a well-curated list of information starting from the basics of SIPs to the well-planned investment plan.

Starting SIPs from Basic 

Most of you must be searching for how to invest in SIP and what are the basic steps of SIP investment for beginners. Well, let’s start from the basics, SIP is simply an investment option in mutual funds where a small amount of money can be invested at regular intervals to accumulate wealth over time. However, there are different types of mutual available in the market for starting SIP. It is one of the most effective ways of investing money in mutual funds and expecting higher returns over the period. Moreover, SIP investment can be beneficial in the long run minimising the risk of loss and allowing the inverter to lift a higher percentage of returns.

So, if you invest a fixed amount of money at regular intervals into mutual funds, it means you are already taking advantage of market volatility without worrying about loss. Furthermore, SIP investment for beginners is a time-tested technique that allows the investor to grow money without worrying about the stock market’s daily fluctuations.

So, now I assume that you have gained basic information about how to invest in SIP. Another crucial thing for SIP investment for beginners at listed below.

Data Analysis: Regular Investment in SIP increases by nearly 25% at around Rs 1.56 lakh crore in 20-2024.

8 Steps to Invest In SIP for Beginners

Starting SIP as a beginner requires following the below-highlighted steps.

1. Set Investment Goals

I assume that, if you are willing to invest in the SIP, then you should must have some investment goals. SIP investment for beginners requires determining the financial goals, risk appetite, and the time horizon for achieving the desired outcomes. Constructing the SIP investment goals will help you choose the right mutual funds that perfectly align with your investment goals.

2. Arrange the Required Documents

Here, comes the first step in starting SIP for beginners. The beginners must have the following documents in their hands before investing in SIP.

• Identity Proof(Aadhar, Voter ID, etc)
• Pan card 
• Address Proof
• Bank Account Details

These are the essential documents required to start your investment journey other than the cash. 

Note: Make sure to pass the authorized documents and ensure that every detail provided by you is correct and complies with the current KYC norms.

3. Plan Your KYC

Before entering the SIP investment journey, it is a must to comply with the KYC norms imposed by the government. An individual has to fill out the application form at any authorized bank post office where pre-cards are issued. An individual can also fill out the form by online mode. The online application forms include personal details, such as name, address, ID proof, etc including the declaration form about the making investment.

4. Register for SIP

For easy investing in a Systematic Investment Plan(SIP), you have to register with the Indian broker or financial adviser, you wish to work for. However, there are many authorized Indian brokers or financial advisors available in India. You can register with any of them and choose a wide range of SIP investment plans, that suit your investment goals. 

5. Select the Right Plan Compliance with Investment Goals 

Another crucial step of SIP investment for beginners. Choosing the wrong plan that doesn’t align with your investment goals might end with the average return but selecting the right plan that perfectly aligns with the investment goals results in a higher percentage of returns. Almost, all SIP plans are different and offer different benefits but before choosing, it is necessary to conduct detailed research on it.

To choose the best plan, you can ask yourself about the risk(Calculated risk), the number of shares you want, the percentage of returns, and what type of inverter you are.

Asking these questions yourself will help you clear your self-doubt and go for better available plans.

6. Select the Investing Amount 

Choosing a fixed investing amount is the best way of doing SIP for beginners. It describes the amount you want to invest in SIP every month, week, quarterly, or annually. However, the investing amount depends on many factors like your monthly income, and how worthy it will be at any point in time.

7. Choose a Specific Date for SIP

Select an appropriate date of SIP investment as per your convenience and comfortability as the reaching dates will automatically deduct the money from your bank account. So, before setting any SIP date, must be prepared for that.

8. Submit Your Form

Hope, you finally choose the mutual funds company to start SIP. Submit the application form depending on your preference as you can submit it either through offline or online modes. You can submit your KYC directly through the Demat account at the post office or banks.

Starting SIP investment for beginners is a straightforward way with the help of our guide where every information is curated thoroughly for the convenience of users.

Market Experts: SIP is one of the most preferred ways to invest for retailers over lump sum investment. So, don’t rush to stock up and get the equity fever.

Crucial Factors to Consider Before Starting SIP

Starting SIP for beginners is full of complexity as they have many bad thoughts about market insights. Somewhere, they find difficulties in figuring out how to invest in SIP and remain on the safer side. So, if you are also looking for the safest approach to invest in SIP, consider the below points.

• Consider your financial Goals: The safest approach to investing in SIP is to determine your financial goals and objectives of investment. As SIP investment is a long-term goal so, the objective must be long-term to achieve good money. Investing in SIP is just like investing for retirement, building an extra asset for emergencies, or saving for significant purchases.

• Consider Investment Horizon: Investment horizons refer to the specific time frame for which you intend to invest in SIP.  For example, if you plan to invest in SIP for significant purchases like cars, houses, etc, the funds must be for 3 to 5 years.

• Inspect Your Risk: Before investing in a Systematic Investment Plan, it will required to prioritise your risk appetite. The describes the amount of money you are ready to take a risk on it. However, it should be dependent on your investment goals and risk tolerance.

• Calculate SIP Returns: Once you are done with the above-discussed factors of investing in SIP for beginners. Now, you can use a SIP calculator to determine the specific amount you need to invest based on your targeted goals or portfolio size. The calculator presents all the data from the initial deposit amount until retirement. It briefs you about the money you need to invest every month to achieve your desired portfolio.

• Seek Expert Advice: Investing in Systematic Investment Plans is not risk-free. So, if you are desiring to invest in SIP, it is necessary to seek market experts who are prominent in granting financial advice. This helps in lowering the risk and gaining the best possible outcomes for the market. 

Conclusion

SIPs are the go-to option when it comes to regular investment of a small portion of your earnings.  A systematic Investment Plan is an innovative approach and hassle-free mode to put your money in mutual funds and expect higher returns. However, it is a long-term goal so you have to keep patience on your investing portfolio as well for the best wealth creation. It is a better way to invest in SIP investment, especially for beginners who are looking to invest in SIP with the low risk of market volatility as compared to the other stocks. 

The money in the SIPs grows continuously and predictably all it requires is discipline and regular investment. To gain better insights on how to invest in SIP as a beginner you can check  SIP investment for beginners, a detailed guide on SIP investment.