How to open SIP account online

To open a SIP account online, start by collecting essential documents like your PAN card, Aadhaar card, and bank details. Choose a reliable platform, fulfill KYC requirements, and enroll to establish your account. Once registered, select the SIP plan, connect your bank account for automated transactions, and finally, review the details carefully.
How to open SIP account in mutual fund
3 min
30-January-2025

To open a SIP account online in India, follow these steps: gather essential documents such as your PAN card, address proof, and a passport-sized photo, complete your KYC verification through an AMC or RTA website, sign up on a mutual fund platform, select your investment plan and amount, choose a payment method and date, and submit the online application form to start your SIP.

This article will explain how you can open an SIP account online and what are the eligibility requirements.

What is an SIP Account?

Before exploring the steps to open a SIP account, it is important to understand what a SIP account is and how it functions. A SIP (Systematic Investment Plan) account allows investors to invest in mutual funds in a structured and disciplined way.

With a SIP, investors contribute small, fixed amounts at regular intervals—such as monthly or quarterly—instead of making a one-time, lump-sum investment. This approach helps automate the investment process into selected mutual fund schemes, making it easier to build wealth consistently over time.

Can I open an SIP account online?

Systematic Investment Plans (SIPs) are popular when it comes to investing, and most investors like to invest in mutual funds through SIPs.

You can invest in mutual fund SIPs in two ways: online or through a mutual fund distributor. However, many investors are still unsure of how to open an online SIP account. Let us now understand the documentation requirements and how you can open an SIP account online.

How to open an SIP account online?

Compared to the conventional method of investing, which involves filling out an application, investors may find it easier to open an SIP account online, thanks to several digital platforms.

However, completing the e-KYC is a prerequisite for opening an SIP account online. To comply with KYC regulations, you must have all the documents in place, such as proof of address, PAN Card, etc. The actions that must be taken are as follows:

Step 1: Collect the necessary documents

Gather the required documents. As previously stated, you need a PAN card, proof of address (driver's licence, utility bill, bank statement, etc.), a passport-size photo in .jpeg or .png format, and a cancelled cheque for the bank details.

Step 2: Be KYC compliant

Next, you must comply with KYC. When the documents are prepared, you can complete the KYC on any AMC or RTA website that offers an e-KYC option.

E-KYC stands for electronic KYC. You must complete e-KYC by providing basic information such as name, date of birth, address, and mobile number. You must also upload a passport-size photo, a copy of your proof of address, and a copy of your PAN card. To verify the information, an in-person video conference is necessary for IPV (In-Person Verification).

Step 3: SIP Login

Register with a financial advisor or an Indian broker after completing KYC. You are free to select any SIP plan to invest in after registering.

Step 4: Decide investment amount, scheme plan and option

Select the mutual fund scheme, option, and investment amount. This is a crucial phase in which you must select the scheme name and SIP amount. Typically, investors have the choice between regular and direct plans, as well as between growth, dividend distribution, and dividend reinvestment options.

Most AMCs offer an online SIP calculator to assist investors in determining how much to invest daily, monthly, weekly, etc., to accumulate the specified goal corpus.

Step 5: Decide payment mode and date

Select the payment date and mode. You must choose a particular date of the month and make the payment for the first SIP instalment after deciding whether to start a daily, weekly, monthly, or quarterly SIP investment. It's crucial that you pick this day carefully, as the amount gets deducted from your account.

You must then choose the method of payment. There are a few choices available, including having the money automatically deducted from your account via net banking, NEFT/RTGS payment, or OTM (one-time mandate) registration.

Step 6: Submit the form

After filling out the form online, you should submit it to the AMC. The AMC sends an acknowledgement via SMS and email. You will receive an email with the SOA (Statement of Account). The units will be distributed on the same day if the SIP is submitted online (if you have a Demat account) by the deadline specified in the scheme.

Step 7: Review and validate

Carefully review all entered information, including your SIP amount, frequency, and bank details. Confirm your SIP to begin investing once everything is accurate.

The SIP initiation process may vary slightly depending on the chosen mutual fund company and your existing accounts. Before deciding when and where to invest, consider these factors:

  • Minimum investment: SIPs have different minimum investment amounts. Choose one that fits your budget and goals.
  • Exit load: Some SIPs have exit loads (penalties for early withdrawal). Review these terms before investing.
  • SIP vs. Lump Sum: SIPs involve regular small investments, while a lump sum is a one-time large investment. Consider a lump sum if you have a significant amount available, but be mindful of market timing challenges. SIPs offer the benefit of averaging your investment cost over time.

Documents required to open an SIP account online

The first step in opening a mutual fund SIP account is to finish your mutual fund e-KYC. Your name, address, place of business, and identification are all verified as part of the identity verification process.

The documents you must submit include:

  • A copy of the cancelled check from your bank account
  • A passport-size photo
  • Proof of identity and address (PAN card, voter ID, passport, Aadhaar card, utility bill, or driver's licence)
  • Bank statement
  • Your employer's proof of address (optional)

SIP account verification process

Once you have the necessary documents, you can upload them on the fund house's website that offers e-KYC services by simply logging in.

After uploading, you will need to complete an in-person verification. Once your documents are verified, your KYC process will be completed.

To simplify KYC, you can now opt for Aadhaar-based e-KYC. For this, visit the KRA’s website, fill in basic details like your name, contact information, and PAN card number, and enter the OTP sent to your Aadhaar-registered mobile number.

Aadhaar-based e-KYC offers several advantages:

  • Fewer details required
  • Automatic data retrieval from UIDAI if your mobile number is registered
  • No need for a video verification call
  • Lower risk of manual errors

Once the verification is complete, you can start investing.

Eligibility for opening an SIP account

Make sure you have the following documents in order to be eligible for opening an SIP account:

  • PAN Card: This is your tax identification number and is necessary for any financial transaction.
  • Proof of address: Any legitimate document containing your current address, such as a utility bill, bank statement, driver's licence, or Aadhaar Card, will do.
  • Cheque cancellation: This is necessary to link your bank account to receive automatic SIP payments.

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Mutual fund SIP contributions soar 34% to Rs 25,320 crore

  • SIP contributions: Increased 34% to Rs. 25,320 crore in November (from Rs. 18,838 crore in January).
  • SIP asset base: Rose 32% to Rs. 13.54 lakh crore (from Rs. 10.26 lakh crore in January).
  • Average ticket size: Slight increase of 4%, from Rs. 2,379 to Rs. 2,476.
  • Gross inflows: Near record high in November, up 3.5% from the 3-month average. Consistent inflows above Rs. 20,000 crore for 8 months and Rs. 15,000 crore for 17 months.
  • SIP AUM: Reached Rs. 13.54 lakh crore, second highest ever, up 45.4% YoY. Represents 19.9% of total AUM and 35% of open-ended equity-oriented AUM.
  • New SIP registrations: Slight dip of nearly 5% in the calendar year (49.46 lakh in November vs. 51.84 lakh in January).
  • Total SIP accounts: Significant growth of nearly 29% in 2024, reaching 10.22 crore in November (from 7.91 crore in January).
  • Net SIP addition: Decreased by 60.5% from the 3-month average due to increased discontinuations.
  • Active SIP accounts: Increased by 37.4% YoY, reaching 10.23 crore in November.
  • Retail folios: Grew by approximately 3% in 2024, reaching 17.54 crore in November (from 16.95 crore in January).

Benefits of SIP

A Systematic Investment Plan (SIP) offers several advantages, including:

  • Rupee-cost averaging: By investing a fixed amount regularly, you purchase more units when the market is down and fewer when it's up, helping to minimise the effects of market volatility.
  • Professional fund management: SIPs benefit from expert fund managers, which can yield better results than selecting individual stocks.
  • Financial discipline: SIPs promote regular, consistent investments, helping you maintain a disciplined approach to building wealth.
  • Compounding: SIPs harness the power of compounding, where reinvested returns help grow your portfolio over time.
  • Cost-effective: SIPs allow you to build a portfolio gradually with smaller, affordable contributions, making it a budget-friendly option.
  • Flexibility: You can adjust your investment amount based on your financial situation, starting small and increasing your contributions as needed.
  • Freedom from market timing: With SIPs, you can invest steadily without worrying about timing the market, letting the cycles work to your advantage.

Conclusion

Any SIP investment requires careful consideration and planning, taking into account variables including financial goals, return expectations, risk tolerance, and the regular investment amount. Remember that before making any investment decisions, whether you choose to use SIP or another approach, you must do extensive research and have a comprehensive grasp of the particular SIP and its associated terms.

Now that you know how to open an SIP account online, you should also know that SIP needs planning. You can visit the Bajaj Finserv Mutual Fund Platform, which enables you to compare several mutual funds and select those that perfectly suit your financial needs and goals.

Essential tools for all mutual fund investors

Mutual Fund Calculator

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Frequently asked questions

Can we open SIP online?
Yes. You can open an SIP account online by completing the e-KYC process, choosing your preferred SIP plan, along with the date and SIP amount, and submitting your SIP online.
Can I open SIP through a bank?
Yes, you can. Several banks enable investing in mutual funds as intermediaries and through their own funds.
Is online SIP safe?
Yes. Registering for an SIP online is safe, provided you use a reputed platform, your account is secured, and the website is verified.
Can SIP go in loss?
Yes, you can incur losses while investing through SIPs. This is due to market fluctuations, risks associated with asset allocation, government policy changes, inflation, and changing interest rates.
Does SIP guarantee returns?
No. Since SIP investments are always subject to market fluctuations and risks, they do not always guarantee positive returns.
Is it a good time to start SIP?
It is always a good time to start investing for your future. However, financial objectives for the long-term and individual circumstances must be considered. That said, an early start and regular investments after that usually lead to substantial wealth creation in the long run.
How does a SIP account work?

In a SIP, a fixed amount is regularly deducted from your savings account and invested in mutual funds. You can automate the process through auto-debit, ensuring consistent investments without the need for manual action, which promotes disciplined investing habits.

How can I open a SIP account online?

To open a SIP account online on AMC website or other platforms like the Bajaj Finserv Platform, complete your KYC by submitting personal details and necessary documents. After that, select a mutual fund, choose the SIP amount and frequency, and provide your bank details for automatic deductions.

What are the benefits of opening a SIP account?

SIP accounts offer financial discipline, flexibility, and convenience. You can start investing with as little as Rs. 100, benefit from rupee-cost averaging, leverage the power of compounding, and build wealth steadily for long-term goals.

What documents are required for KYC to open a SIP account?

The required documents for KYC include identity proof (such as PAN card, Aadhaar, or passport), address proof (like a utility bill or bank statement), and a passport-size photo. You'll also need a copy of a cancelled cheque from your bank account.

Can I modify my SIP investment after starting?

Yes, SIP accounts are flexible. You can change the investment amount, adjust the frequency, add top-ups, pause, or stop your SIP at any time. You can also redeem your investments without penalties whenever needed.

Can I open multiple SIP accounts in different funds?

Yes, you can open multiple SIP accounts across various mutual funds. However, it's recommended to invest in 3-4 well-performing funds to ensure diversification while keeping your portfolio simple and effective.

What if I invest Rs. 1000 in SIP for 20 years?

Investing Rs. 1000 monthly for 20 years can potentially build a substantial corpus, though actual results depend on market performance. Assuming a hypothetical 15% annual return and a 10% yearly increase in investment, a mutual fund calculator suggests a potential retirement corpus of Rs. 7.36 crore by age 60. However, remember that returns are not guaranteed, and this is just an estimate.

Which SIP gives 40% return?

While some funds have delivered high returns in specific periods, like the LIC MF Small Cap Fund's 40.03% XIRR on SIPs in early 2024, no SIP guarantees a 40% return. Market conditions constantly change, impacting fund performance. Past returns don't predict future results, and high returns in one period don't ensure similar future gains. Thorough research is crucial.

How to get Rs. 50 lakhs in 10 years with SIP?

Achieving Rs. 50 lakhs in 10 years via SIP requires a significant monthly investment and a strong fund performance. One fund, with a past 10-year return of 27.14%, could have potentially turned a Rs. 10,000 monthly SIP into over Rs. 50 lakhs. However, this is based on past performance, not a guaranteed future outcome. Market conditions can significantly impact returns, and similar future performance isn't assured.

What is the SIP of Rs. 50,000 per month?

A Rs. 50,000 monthly SIP involves investing Rs. 50,000 at regular intervals (usually monthly) in a chosen mutual fund scheme. Over time, this consistent investing, coupled with compounding returns, can potentially lead to substantial wealth growth. For example, a Rs. 50,000 monthly SIP for 15 years, assuming a hypothetical 15% annual return, could grow significantly. However, remember that market fluctuations can impact actual results.

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Disclaimer

Bajaj Finance Limited (“BFL”) is an NBFC offering loans, deposits and third-party wealth management products.

The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. 

This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.