How does an SIP work?

SIP helps automate your savings and is a smarter way to achieve your dreams.

₹25,000
15 Years

If you invest   ₹25,000 every month for 15 years at 12 % rate of return , you may accumulate ₹1,18,98,285

* Based on an assumed rate of return(s) of
, the above Investment simulation is for illustration purpose only. It should not be construed as a promise on minimum returns and safeguard of capital. KMAMC is not guaranteeing or promising, or forecasting any returns. SIP does not assure a profit or guarantee protection against loss in a declining market. . SIP Calculator is designed to assist you in determining the appropriate amount. SIP calculator alone is not sufficient and shouldn't be used to develop or implement an investment strategy. KMAMC makes no warranty about the accuracy of the calculators/reckoners. The examples do not purport to represent the performance of any security or Investments. In view of the Individual nature of tax consequences, each investor is advised to consult his or her, professional tax advisor.
Wealth Builder

SIP is a great tool which helps you build wealth over the long term.

₹10,00,000
5 Years
₹1,00,000

To achieve your financial goal of ₹10,00,000 in 5 years, you may need to invest ₹1,71,460.

SIP
₹15,323
Start Now
* Based on an assumed rate of return(s) of
, the above Investment simulation is for illustration purpose only. It should not be construed as a promise on minimum returns and safeguard of capital. KMAMC is not guaranteeing or promising, or forecasting any returns. SIP does not assure a profit or guarantee protection against loss in a declining market. . SIP Calculator is designed to assist you in determining the appropriate amount. SIP calculator alone is not sufficient and shouldn't be used to develop or implement an investment strategy. KMAMC makes no warranty about the accuracy of the calculators/reckoners. The examples do not purport to represent the performance of any security or Investments. In view of the Individual nature of tax consequences, each investor is advised to consult his or her, professional tax advisor.
TAKE THE LEAP OF SIP TO ACHIEVE YOUR DREAMS

People often forget that dreams aren’t fulfilled overnight; they require planning and smart decision making. Since you have taken the first step and identified your goal, we recommend you not wait and take the leap to achieve whatever it is you aspire to achieve.

First slide
First slide
First slide
First slide
First slide
Take the SIP route without delay

Time is the best wealth creator - The earlier you start and longer you stay invested, the more rewarding it is! Hence avoid delays in investing.

Need assistance? Click here
Based on an assumed rate of return(s) of
, the above Investment simulation is for illustration purpose only. It should not be construed as a promise on minimum returns and safeguard of capital. KMAMC is not guaranteeing or promising, or forecasting any returns. SIP does not assure a profit or guarantee protection against loss in a declining market. . SIP Calculator is designed to assist you in determining the appropriate amount. SIP calculator alone is not sufficient and shouldn't be used to develop or implement an investment strategy. KMAMC makes no warranty about the accuracy of the calculators/reckoners. The examples do not purport to represent the performance of any security or Investments. In view of the Individual nature of tax consequences, each investor is advised to consult his or her, professional tax advisor.
ENHANCE YOUR PLAN OF ACHIEVING YOUR DREAMS

A small but regular investment in SIP can multiply into a significant sum over a long period. By increasing these small amounts in SIP over time can boost your overall investments effortlessly. This boost in SIP can increase your earning potential along with the amount of wealth you accumulate over time.

SIP Top-Up

SIP Top-up Facility provides an option to increase your SIP installment amount at pre-defined intervals, in turn boosting your investments.

SIP top-up would increase the value of your SIP investment from ₹12,00,000  to and your Investment is expected to reach instead of at the end of 10 Years.

Need assistance? Click here
Based on an assumed rate of return(s) of
, the above Investment simulation is for illustration purpose only. It should not be construed as a promise on minimum returns and safeguard of capital. KMAMC is not guaranteeing or promising, or forecasting any returns. SIP does not assure a profit or guarantee protection against loss in a declining market. . SIP Calculator is designed to assist you in determining the appropriate amount. SIP calculator alone is not sufficient and shouldn't be used to develop or implement an investment strategy. KMAMC makes no warranty about the accuracy of the calculators/reckoners. The examples do not purport to represent the performance of any security or Investments. In view of the Individual nature of tax consequences, each investor is advised to consult his or her, professional tax advisor.

SYSTEMATIC INVESTMENT PLAN

SYSTEMATIC INVESTMENT PLAN

SYSTEMATIC INVESTMENT PLAN

Common Questions
1.What is S.I.P?

Systematic Investment Plan, commonly known as S.I.P. allows you to invest regularly, a fixed sum in your selected mutual fund. In S.I.P, a fixed amount is deducted from your bank account every month and directed towards the mutual fund you choose to invest in.

2.What are the benefits of SIP?

S.I.P offers many benefits. A few of them are: a) Power of Compounding b) Disciplined Investing c) Rupee Cost Averaging

3.How to start an SIP?

Starting an S.I.P is easy. First, you need to select a fund that is best suited to your long-term goals and risk profile. You can do this yourself, or you can take the help of a professional financial advisor. Once you have zeroed-in on a fund, you need to fill the S.I.P application form, post which a fixed amount is deducted from your bank account every month and directed towards the mutual fund you choose to invest in.

4.How much return can I expect on an SIP investment?

Unlike traditional fixed income products, Mutual Fund investments do not provide a guaranteed return. But, historically, over a long-term, investments in Equity Funds have generated better returns than traditional fixed-income products. Having said that, Mutual Fund investments are subject to market risks. You are advised to read all scheme related documents carefully before investing.

5.What are some of the best SIP plans?

There is no such thing as a "Best Mutual Fund." It is a myth. Every fund has a unique investment objective that caters to the needs of different investors. You need to select the right fund for yourself based on your risk appetite and time-frame for achieving your life goals.

6.What is meant by “SIP frequency?”

S.I.P frequency refers to the pre-defined interval at which a fixed amount, mandated by you, is deducted from your bank account. You can go with a monthly, quarterly, semi-annual, or annual frequency.

7.Is there a minimum amount to start an SIP?

The minimum amount to start an S.I.P varies from fund-to-fund. Having said that, many funds in India now let you start an S.I.P of 500 rupees. Investing via S.I.P is not limited to small amounts. You can invest any amount you want. There is no upper limit on S.I.P. Minimum tenure of SIP is 6 months, whereas there is no maximum tenure.

8.What is the maximum amount I can invest through SIP?

Investing via S.I.P is not limited to small amounts. You can invest any amount you want. There is no upper limit on S.I.P.

9.Can I have multiple SIPs?

Yes, you can start more than one S.I.P. There is no restriction on the number of Systematic Investment Plans you can have at a given point in time.

10.Does SIP offer the options of Growth and Dividend?

Yes, when you start an S.I.P, you can choose the option of either Growth or Dividend.

11.Can I switch between the options of Growth and Dividend at any point in time?

Yes, you can any time switch your S.I.P from Growth to Dividend and vice-versa, in an open-ended fund, without a lock-in period.

12.Is SIP available for all types of mutual funds?

Yes, you can start an S.I.P for any open-ended mutual fund.

13.What is meant by “Rupee Cost Averaging?”

One of the main benefits of S.I.P is Rupee Cost Averaging. It simply means that you get more units when the market goes down and less when the market goes up. Thus, you average out the cost of total units bought. This helps you to optimize returns over the long term.

14.Can I change the SIP amount at any time?

Yes, you can increase your S.I.P amount at any point. There are two ways to do that. You can either start a new S.I.P with the additional amount or you can opt for a facility, commonly known as S.I.P Booster or S.I.P Top-up, that lets you increase your S.I.P instalment amount at a pre-defined interval.

15.Can I stop my SIP at any time?

Yes, you can stop your SIP instalment at any point of time. There are no charges levied for stopping an S.I.P. Moreover, you can withdraw the corpus accumulated through previous instalments.

16.Can I switch my SIP investment from one fund to another?

No, you can't switch your S.I.P from one fund to another. You will need to stop the current one and start a new one in your desired fund. But, the corpus accumulated through past instalments, in an open-ended fund without a lock-in period, can be switched to another fund.

17.Will I incur a penalty if my SIP installment fails to get through due to an insufficient account balance?

There is no penalty levied by Mutual Funds if your account balance is insufficient when the S.I.P instalment is due. It's just that your instalment for that particular month will not be processed, but your S.I.P will continue normally next month onwards, provided the balance is sufficient.

18.Can I invest in ELSS using SIP?

Yes, it is possible to invest in an ELSS fund through S.I.P.

19.What is the ideal investment horizon for an SIP?

S.I.P is a good habit of saving & investing a fixed amount regularly with the objective of creating wealth over the long term. Hence, an S.I.P should be done for perpetuity, unless you are starting an S.I.P for a specific goal that is due on a particular date.

20.Which SIP frequency is better – weekly or monthly?

Assuming the same rate of return, a weekly frequency will turn out to be a better choice as you get the benefit of compounding. Unfortunately, the market returns are not predictable. Hence, there is no correct answer as to which frequency is better. That being said, it is advisable to select the frequency based on your cash flow. Hence, salaried individuals prefer a monthly frequency for their S.I.P.

21.Should I invest in SIP directly or through an advisor?

There more than 1000 open-ended mutual funds in India. Selecting the right fund is always an uphill task. It requires in-depth knowledge of markets and mutual funds. If you have the time and the required skills to analyse the funds for finding the one that suits your needs and risk appetite, you can go for Direct funds. Otherwise, it is advisable to go with the professional financial advisors who will recommend you the right fund that is best suited to your needs and life-goals.

22.Is there any extra or hidden cost that I will incur for starting an SIP?

No, there is no extra charge or hidden cost for starting an S.I.P.

23.If the returns on my investment are negative, what should I do?

When facing negative returns, the most common mistake investors tend to do is to stop their S.I.P and withdraw the accumulated corpus. Ideally, if you have a long-term investment horizon, a market downturn should be treated as an opportunity to buy more to average out the cost of total units. This will help you to generate favorable returns when the market becomes positive.

24.What is meant by “SIP Booster” or “SIP Top-up?”

S.I.P Booster or S.I.P Top-up lets you increase the amount of your S.I.P installments at pre-defined intervals. This way, you don't need to start a new S.I.P from time-to-time. The increase in the instalment amount can be a fixed sum of money or it can be a percentage of your current instalment value.

25.What is expense ratio?

The total expense ratio, commonly known as T.E.R, is a measure of the total costs associated with managing and operating a mutual fund. These costs consist primarily of management fees and additional expenses, such as trading fees, legal fees, auditor fees, and other operational expenses. An expense ratio of 1% per annum means that each year 1% of the fund's total assets will be used to cover expenses.

26.What is a consolidated account statement or C.A.S?

Consolidated Account Statement is a single & combined account statement which shows the details of financial transactions made by an investor during a month across all Mutual Funds and also other securities held in dematerialised mode. C.A.S is issued for those folios or accounts wherein a financial transaction has been made during a month and wherein unit holders are identical, identified by Income Tax Permanent Account Number, PAN.

27.As an investor, how much time will it take to receive dividends proceeds?

A mutual fund is required to dispatch to the unitholders the dividend warrants within 30 days of the declaration of the dividend and the redemption or repurchase proceeds within 10 working days from the date of redemption or repurchase request made by the unit holder. In case of failures to dispatch the redemption/repurchase proceeds within the stipulated time period, Asset Management Company is liable to pay interest as specified by SEBI for the period of delay.

28.How to know where the mutual fund scheme has invested the money mobilized from investors?

The mutual funds are required to disclose full portfolios of all of their schemes on a monthly basis on their website. The scheme portfolio shows investment made in each security i.e. equity, debentures, money market instruments, government securities, etc. and their quantity, market value and % to NAV. These portfolio statements are also required to disclose illiquid securities in the portfolio, investment made in rated and unrated debt securities, non-performing assets, etc.

29.If schemes in the same category of different mutual funds are available, should one choose a scheme with lower NAV?

Assuming you invest exactly the same amount in two different funds with identical portfolios, a low NAV fund will fetch you a higher number of units, whereas, a high NAV fund will fetch you a lower number of units. Returns are determined on the investment value and are a factor of appreciation or depreciation of stocks in the portfolio, not the number of units. Therefore, the NAV is immaterial.

30.Can an investor appoint a nominee for his investment in units of a mutual fund?

The nomination can be made by individual investors who are either investing for the first time or are already having a folio. You can add or change nominee at any time simply by filling the nomination form for the respective folio. Non individuals including society, trust, body corporate, partnership firm, holder of Power of Attorney cannot nominate.

31.If a mutual fund scheme is wound up, what happens to money invested?

In case of winding up of a scheme, the mutual funds pay a sum based on prevailing NAV after adjustment of expenses. Unitholders are entitled to receive a report from the mutual funds which gives all necessary details.

32.What is the purchase price?

Purchase price is the price paid by an investor to purchase a unit of a mutual fund scheme. In Mutual Fund context, it is defined as the Net Asset Value, or N.A.V.

33.What is redemption price?

When investors choose to return any of their units to the scheme and get back their equivalent value, it is called a re-purchase transaction. If the fund does not levy an exit load, the redemption price will be same as the purchase NAV. The redemption price will be lower than the NAV in case the fund levies an exit load.

34.What is a Mutual Fund?

Mutual Funds are registered as trusts. They pool money from a number of investors who share a common investment objective. The collected money is invested in equities, bonds, or other securities, based on the objective of the fund. Each investor owns units, which represent a portion of the holdings of the fund. The appreciation or depreciation of the underlying portfolio is distributed proportionately amongst the investors.

35.What is an A.M.C

Day to day operations of mutual fund are handled by the AMC. It therefore arranges for the requisite infrastructure, engages employees, provides for the requisite software, handles advertising, interacts with regulators and various service providers. The AMC has to take all reasonable steps and exercise due diligence to ensure that the investment of funds pertaining to any scheme is not contrary to the provisions of the SEBI regulations and the trust deed.

36.What is N.A.V?

Net Asset Value, commonly known as NAV, represents a fund's per unit market value. This is the price at which investors buy or sell fund units. It is calculated by dividing the total value of all the assets in a portfolio, minus all its liabilities. Since the market value of securities changes every day, N.A.V of a scheme also varies on a daily basis.

37.What is K.Y.C and how to get K.Y.C verified?

KYC is an acronym for "Know Your Customer" and it is a mandatory process for investing in Mutual Funds as per regulations. One needs to submit the KYC form along with mandatory documents like photo, photo I.D., address proof. To get complete details, visit kotakmf.com/Investor-info

38.What is an open-ended mutual fund scheme?

Open-ended funds are the funds that allow an investor to buy and sell units on a continuous basis, even after the initial offering period.

39.What is a closed-ended mutual fund scheme?

Unlike open-ended funds, investors cannot buy or sell the units of a closed-ended fund after the NFO period is over. However, the fund house lists its closed-ended scheme on stock exchange, where, just like any other stock, investors can buy or sell the said scheme based on the volumes.

40.What are the different types of Mutual Fund schemes?

Mutual Funds are broadly classified in the following groups: a. Equity Schemes b. Debt Schemes c. Hybrid Schemes d. Solution Oriented Schemes e. Other Schemes You can visit kotakmf.com/SchemeCategorization

41.What is a debt-oriented scheme?

A debt fund is a mutual fund scheme that invests in fixed income instruments, such as Corporate and Government Bonds, corporate debt securities, and money market instruments, etc. that offer capital appreciation. Debt funds are also referred to as Income Funds or Bond Funds. Debt funds are ideal for those investors who want to generate extra returns as compared to traditional fixed-income options and are willing to take additional risks, albeit lower than that of Equity Funds.

42.What is an equity-hybrid mutual fund?

Equity Hybrid funds invest in a mix of equities and debt, with at least 65% in Equity, aiming to give investors the best of both worlds. An investor looking to invest in a mix of Equity and Debt can invest in this fund rather than investing in two funds separately as there is an advantage of Equity taxation on the entire investment and the benefit of portfolio rebalancing without manual intervention.

43.What are Tax Saving Mutual Funds?

Tax saving mutual funds are just like any other mutual fund with an added tax-saving benefit. The special feature of this type of mutual fund is that the investments made in the tax-saving mutual funds are eligible for tax benefits under section 80C of the Indian Income Tax Act. Most of the tax-saving mutual funds are ELSS schemes and make investments in the growth-oriented equity market. They have a lock-in period of 3 years.

44.What is a Fund of Funds scheme?

A scheme that invests primarily in other schemes of the same mutual fund or other mutual funds, is known as an F.O.F scheme. An F.O.F scheme enables the investors to achieve greater diversification through one scheme. It spreads risks across a greater universe.

45.Is there any minimum lock-in period for mutual fund units?

There is no lock-in period in the case of open-ended funds. However, in the case of tax-saving funds, a minimum lock-in period is applicable.

46.How much return can I expect from a Mutual Fund investment?

Unlike traditional fixed income products, Mutual Fund investments do not provide a guaranteed return. But, historically, over the long term, investments in Equity Funds have generated better returns than traditional fixed-income products. Having said that, Mutual Fund investments are subject to market risks. You are advised to read all scheme-related documents carefully before investing.

47.Which is better - Lumpsum or SIP?

The answer to this question depends on the stock market conditions. During upward trends, the lump sum mode of mutual fund investment tends to give relatively higher returns whereas during falling markets, investments made via a SIP generally provides better returns than a lump sum investment. Having said that, the choice is also dependent on your cash-flows.

48.Is my investment safe in Mutual Fund?

The level of risk in a mutual fund depends on what it invests in. Stocks are generally riskier than bonds, so an equity fund tends to be riskier than a fixed income fund. Plus, some specialty mutual funds focus on certain kinds of investments, such as emerging markets, to try to earn a higher return. These kinds of funds also tend to have a greater risk of a larger drop in value yet the greater the risk, the greater the reward or potential for higher returns.

49.Can a Mutual Fund house run away with my money?

The answer is no. The reason why your AMC can't swindle—or run away—with your money is that the mutual fund is a trust. The trust's beneficiaries are the investors. So, if a trust has to be dissolved, for whatever reason, the money must be given back to the investors, as per the law

50.What is a Balanced Advantage Fund?

As the name suggests, these schemes dynamically manage the equity and debt part of the corpus based on the market conditions. Fund houses follow their own ratios and formulas to manage the investments dynamically. In theory, these schemes will decide their equity exposure based on the valuations in the market. That means when the market is very high or overvalued, they will have lower equity exposure. When the market is rightly-priced or undervalued, they will up their equity exposure.

51.When should I start investing in Mutual Funds?

There is a beautiful Chinese proverb, “The best time to plant a tree was 20 years ago. The second best time is now.” There is no minimum age when one can start investing. The moment one starts earning and saving, one can start investing in Mutual Funds. Mutual Funds have many different schemes suitable for different purposes. Some are suitable for growth over long periods, whereas some may be for those in need of safety with regular income, and some provide liquidity in the short term.

52.What are some mistakes people make when investing in Mutual Funds?

Some of the common mistakes while investing in Mutual Funds are: - Investing without a goal and without understanding the risk profile. - Selecting a product without doing proper due diligence - Trying to time the market - Reshuffling your investments too often - Stop investing when the markets are down - Putting all your eggs in one basket - Not considering the impact of inflation

53.Who all can invest in Mutual Funds?

Anyone, people of all ages and economic backgrounds, can invest in Mutual Funds. Parents or guardians can invest in Mutual Funds on behalf of children below the age of 18. NRIs, except residents of U.S.A and Canada, can also invest in Mutual Funds.

54.What is the Power of Compounding?

In compounding, interest is generated not only on the initial amount invested but also on the previously accumulated interest. Hence, it is advisable to start investing as early as possible to reap the maximum benefit of compounding.

55.What is the Systematic Withdrawal Plan, S.W.P?

SWP refers to Systematic Withdrawal Plan which allows an investor to withdraw a fixed or variable amount from his mutual fund at a fixed, pre-determined interval, as per his needs. Those investors who are looking for a fixed cash-flow at regular intervals can opt for SWP.

56.How long does one need to stay invested in a Mutual Fund?

Ideal time horizon of a mutual fund depends on the category of mutual fund you are investing in. For example, Equity Schemes are recommended for long-term horizon, which is ideally more than 5 years. In case of Debt Category, based on the nature of the underlying fund, the time horizon will differ and you are advised to refer to the offer document before investing.

57.How long does one need to stay invested in a Mutual Fund?

Ideal time horizon of a mutual fund depends on the category of mutual fund you are investing in. For example, Equity Schemes are recommended for long-term horizon, which is ideally more than 5 years. In case of Debt Category, based on the nature of the underlying fund, the time horizon will differ and you are advised to refer to the offer document before investing.

58.What happens to my fund if it gets merged with a different fund?

When an AMC announces a merger of your fund, you have two options – either you accept the merger or you don’t. AMCs give you one month usually for you to decide what to do. If you do not want to accept the merger, you can withdraw the entire investment without an exit load. The fund returns the money to you, at the NAV of the date your request is processed. The fund house may also give you an option to switch out into another scheme from its stable.

59.What should I consider while selecting a Fund?

Here are some factors that you should consider before investing in a fund: - Investment Objective of the fund - Performance against benchmark and peers - Consistency of performance - Fund manager's experience - AMC's track-record - AUM and Expense Ratio of the fund

© Kotak Mutual Fund.2021
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
© Kotak Mutual Fund.2021
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.