A SIP (systematic investment plan) puts a fixed amount into a mutual fund scheme on a fixed date every month.
Narendra Kumar Khatri has helped Jodhpur families set up and run SIPs since 2009. This page explains how a SIP works, what it costs, how the gains are taxed, and what to bring when you visit.
A SIP suits anyone with a regular income who wants to invest part of it every month without guessing the right day to buy. Salaried employees use it. So do shopkeepers with steady monthly takings, and retired people who want to move a lump sum into the market slowly.
It is a poor fit for money you may need in the next year or two. Equity funds can fall 20% or more in a bad year, and a SIP does not stop that from happening. For short-term needs, a bank deposit or a liquid or short-duration debt fund is usually the better home.
You choose a scheme and an amount. The fund house debits your bank account on the date you pick, through an auto-debit mandate (NACH or UPI AutoPay). Each instalment buys units at that day's NAV. When prices are low you get more units, and when they are high you get fewer. Over the years this averages out your purchase cost. It does not remove the risk of loss.
You can stop, increase or add SIPs at any time. Some fund houses also let you pause for a few months. Stopping a SIP costs nothing. An exit load applies only if you redeem units within the period the scheme sets, which is often one year for equity funds. The scheme information document gives the exact terms.
Many schemes accept SIPs of a few hundred rupees a month. The minimum differs by scheme and is printed in the scheme documents. Start with an amount you can keep paying in a bad month, not just a good one.
Every scheme charges an expense ratio. It is a yearly percentage taken out of the fund's assets before the NAV is declared, so you never see it as a separate bill.
Each scheme comes in two plans. A direct plan is bought straight from the fund house, with no distributor, and has a lower expense ratio. A regular plan is bought through a distributor like us. Its expense ratio is higher because it includes the distributor's trail commission. Over 15 or 20 years the difference adds up.
If you are comfortable choosing schemes, filling forms and reviewing them yourself, a direct plan costs less. If you want someone to set things up, keep records, handle changes and sit with you at reviews, a regular plan through a distributor is how that service is paid for.
Purchases also carry a stamp duty of 0.005% of the amount invested.
Each SIP instalment counts as a separate purchase with its own date. When you redeem, the oldest units are treated as sold first.
Mutual fund returns are not fixed. Your SIP can be worth less than what you have put in, sometimes for two or three years at a stretch. The main risks are market falls, the fund manager's choices not working out and, for debt funds, interest-rate and credit risk. Every scheme shows a riskometer, from Low to Very High, on its factsheet. Read it along with the scheme information document.
The other common risk is behaviour. People stop their SIP after a fall and restart after a rise. That buys fewer units when they are cheap and more when they are expensive, which is the opposite of what a SIP is for.
Nick Investment is an AMFI-registered mutual fund distributor (ARN-112296) with access to schemes from more than 40 fund houses. The first consultation is free and comes with no obligation. We speak Hindi and English.
If you already hold mutual funds, bring a recent consolidated account statement (CAS) from CAMS, KFintech or your depository. It shows all your folios in one place.
The office is at Khatri House, Behind S.B.I. Bank, O/s Jalori Gate, Jodhpur. You can walk in Mon–Sat, 10 am – 7 pm, or call first so we can keep the forms ready.
It depends on the scheme. Many accept a few hundred rupees a month, and the scheme information document lists the exact minimum. Pick an amount you can keep paying even in a tight month.
Yes. You can cancel a SIP online, with the fund house, or through us. Stopping costs nothing. An exit load applies only if you redeem units within the period set by the scheme.
Not safer, just spread out. A SIP lowers the chance of putting all your money in at a market peak. The risk of the fund itself is the same either way.
No. We distribute regular plans and are paid trail commission by the fund house, which is included in the scheme's expense ratio. Direct plans, bought without a distributor, have a lower expense ratio.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Nick Investment, Khatri House, Behind S.B.I. Bank, O/s Jalori Gate, Jodhpur, Rajasthan 342001. Mon–Sat, 10 am – 7 pm. Call +91 94141 28970 or WhatsApp. Call +91 94141 28970 · WhatsApp us
Nick Investment is an AMFI-registered Mutual Fund Distributor (ARN-112296). We are not a SEBI Registered Investment Adviser. We distribute regular plans and receive trail commission from the asset management companies, which is included in the scheme's expense ratio.