Daily SIPs in Mutual Fund: How to Setup Daily SIP in INDmoney?
The Dendrocalamus Giganteus or the giant bamboo is the tallest bamboo in the world that can grow as high as 50m (164 ft) in length. This type of bamboo is generally found in Southeast Asia and is also called the Dragon Bamboo. A quick google search would tell you that on average, a bamboo takes about 3 years for the roots to get established. So you get it? For about 3 years, you wouldn’t be able to notice any change in the growth of the tallest grass on the planet. But after those 3 years of perseverance, you see an exponential growth that amounts to a foot a day. How nice would it be to see our investments grow similarly, isn’t it?
Introducing Daily SIPs in Mutual Funds
Most of the dramatic changes in people’s lives come from doing tiny tasks every single day. Inculcating a similar financial discipline in our lives would make a lot of difference to our investments. How about setting aside Rs 100 every single day and investing in a mutual fund? Oh yes, we are aware that consistency would be a challenge in the long term. So we have made it all seamless, you do not have to put in any deliberate effort to set aside the money.
Set aside the amount you would like to invest (Remember, you must start with atleast Rs 100) and forget. We shall ensure that your amount gets invested in the mutual fund of your choice every single day.
What are the benefits of daily SIP in mutual funds?
- Power of Compounding: With the power of compounding, you can grow your wealth while staying invested for the long term. The money you invest shall compound on a daily basis to give you good returns over the long term.
- Convenience: Those who do not earn on a monthly basis would find daily SIPs to be far more convenient to inculcate an investment discipline.
- Flexibility: Want to pause your SIP for a while? When you are with INDmoney, you don’t have to worry. You have the flexibility to increase, edit, pause and then restart your SIPs as per your convenience.
- Start with less and increase gradually: With a daily SIP, you can start with as low as Rs 100 daily and then choose to increase your investment amount gradually.
- Benefit from rupee cost averaging: Investing in mutual funds through a SIP can help you to buy more units when the NAV of the fund is low and buy less when the NAV increases thereby increasing the number of units purchased at a lower cost per unit.
How to start Daily SIP in Mutual Funds?
- Set Your Investment Goal: Setting an investment goal is imperative as every mutual fund comes with a certain benefit. The idea is to choose the right mutual fund according to a goal that you want to achieve. Not just that, with goal-based investing, you can regularly track your investment’s performance and decide whether you would like to increase or decrease your daily SIP amount.
- Choose your desired mutual fund: You can choose any mutual fund as per your investment plan. In the INDmoney app, each mutual fund is segregated into various buckets that you can choose from.
- Select the bank for auto-pay: Once you are done with selecting your desired mutual fund, choose the bank account through which you would want to activate auto-pay. It could take at most 5-7 days for your bank to send a verification link.
- Start your SIP: Once you are done verifying the link, an auto-pay form for authentication will be generated. After that, you are ready to start your daily SIP. Simple, wasn't it? Remember, small daily investments can help you amass a reasonable sum at a later period.
What is Auto-pay and how to set it?
Auto-Pay is a one-time registration process wherein the investor authorizes his/her banker to execute debits to his bank account up to a certain limit based on requests received from BSE (Bombay Stock Exchange)/ ICCL (Indian Clearing Corporation Limited).
The maximum limit for auto-pay is Rs 10 lac.
What are the steps to set-up auto-pay?
- Go to profile
- Click on bank details
- Setup Auto-Pay
- Select Bank
- Enter the limit
- Verify the link
- The auto-pay form would be generated
- Verify if via net-banking/ debit card
- You would be taken to the bank’s website to authenticate the e-mandate/ Auto-Pay.
You could be charged a one-time registration fee, although it varies from bank to bank.
Am I allowed to make manual payments for SIP?
No, you would need to set up the auto-pay as it will facilitate the auto-deductions.
What if I miss a daily SIP installment?
INDmoney always notifies you a few days before your next SIP installment is due. You can also see your upcoming SIPs in the upcoming SIPs section in the Transactions tab.
However, if you want to make up for the missed installment, you can place a lumpsum investment for the same SIP amount.
It is advised to ensure an adequate balance exists in your account.
Which day’s NAV is applicable for my investment?
Mutual Funds are required to release the NAV value of their units daily. Hence, you would be allotted units based on the NAV value on that particular day itself. For this, you must ensure that the required SIP installment is credited to the mutual fund’s bank account before 3:00 PM. To that extent, it is advised to set up an auto-pay option for your daily SIPs to avoid any hiccups.