What is the difference between SIP and Mutual Fund?
This is a good question! SIP means Systematic Investment Planning. It allows you to invest systematically i.e. monthly or quarterly, based on your preference. Now the question arises invest where? SIP is a tool by which you can invest in Mutual Funds. Other tool is a lump-sum investment in mutual funds. So SIP is one way to invest in Mutual Fund.

Why should I start an SIP?

  • It helps you to inculcate financial discipline of your money.
  • It helps you to put the investment plans on your priority list.
  • Early & regular investments can help you to compound the wealth significantly over a long period.
  • Rupee Cost Averaging is the significant reason for choosing the SIP, allowing to gain maximum benefits on his/her investments over time.
  • SIP gives you the flexibility to start, stop, redeem (partial/ full) etc. whenever you like.

How can I start an SIP?

It's very simple to do this. Contact us today. With the help of a trained expert, plan your long-term financial goal and then use the SIP as a tool to achieve that through a disciplined and regular investment option.
Once you have selected the fund, the bank will automatically debit the amount from your account and the money will keep on getting invested in the funds you have chosen

The market has been high ever since I decided to start an SIP. Shouldn't I wait for it to fall before investing?
SIP can be started at any point of the time and at any state of the market. The idea of an SIP is to avoid timings of the market and start investing with a purpose. Due to rupee cost averaging, maximum benefits are attained irrespective of the market's condition.
A long-term investment horizon can help to reduce market risk significantly. Any fund will do well in some environments and less well in others. Holding for the long term allows you to receive the average return, without trying to time the good and bad periods. Planning to consistently put money in regularly for the long term lets you take advantage of times when the market is down (i.e., cheap).

Is there an upper limit on SIP investments?

No, this is a misconception that SIP investments are only done in the case of small amounts. You can invest as much amount as you want, there is no upper limit to the SIP amount. Due to its compounding ability big investments can lead you to large wealth, so investing big amounts is rather a good option.

I've heard that registering for SIPs is a long and tedious process.

Not at all! Simply talk to Kotak Mahindra Bank today. With the help of an Investment Account you can start SIPs through Mobile Banking App, Net Banking or by visiting any of the branches.

My SIPs are not giving me the returns I expected. Should I stop them?

Stopping your SIPs in a market downturn could be the worst thing you can do to your portfolio. By not allowing your fund to average during the falls, you cannot expect it to deliver returns when the bounce back happens. The unit accumulation is higher during low market levels. So ideally a low market valuation now is good for your SIP as you are accumulating more at a low price, giving you higher return in long term.

Can I stop an SIP anytime?

There is no compulsion to complete the tenure of your SIP. When you register an SIP, you need to specify the tenure for which you want it to continue. Investments in Mutual funds are very flexible. After successful registration you can:

  • Withdraw the amount (partially or fully) any time during SIP tenure.
  • Stop or pause your SIP.
  • Extend your SIP for any time frame you want.
  • Increase/decrease the SIP amount.

In certain cases where redemption has been made before the stipulated period, Mutual funds may charge an exit load on the redemption value.
Exit load is typically charged as a small percentage of NAV prevailing at the time you redeem from the scheme. Different mutual fund schemes have different periods in which they levy exit loads.

In which mutual funds can I start a SIP?
Most of the open ended mutual funds accept both SIP and lumpsum investments. If you have an ongoing SIP in any fund and want to be adding some more amount as lumpsum amount, you can do that. If you have an existing SIP and want to start a second SIP in the same fund, you can do that, too. Equity mutual funds are better to gain from SIP way of investing in long term.

What happens if I miss a SIP?

Nothing! Many investors tend to think that if a SIP is missed for any reason, the SIP account will be de-activated. It does not happen. If any of the instalments is missed, the next instalment will be due on same date next month. SIP is generally done with Standing Instruction with the bank so that the monthly amount is automatically deducted from your account, making your investment hassle-free and convenient.

How can I extend the duration of an SIP?

It's really easy to do this. You can do it via Kotak's Mobile Banking App, Net Banking or by filling up a simple form in any of our branches.

How can I shorten my SIP duration?
If you have online access to SIP, you can modify/cancel the SIP with just few clicks but if you don’t have online access, you can visit any of Kotak Mahindra Bank Branches to do that.

Is it necessary to have a Demat Account for SIP?

A Demat Account is mandatory for trading in the stock market. It is not required for Mutual Fund investments of any kind including SIP. For Mutual Funds, the mandatory requirement is filling up a Know Your Customer form or KYC.

What are the documents needed to start an SIP?

To invest in Mutual Fund via SIP or lumpsum you need to have SEBI KYC. KYC requires your PAN Card and valid address proof along with the form. If you already have the SEBI KYC, you can simply apply for an SIP.


Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.

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Frequently Asked Questions

What is a Mutual Fund?

Mutual fund (MF) is a mechanism for pooling money by issuing units to the investors and investing funds in securities in accordance with objectives disclosed in the offer document.

Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is diversified because all stocks may not move in the same direction in the same proportion at the same time. Mutual funds issue units to the investors in accordance with the quantum of money invested by them. Investors of mutual funds are known as unitholders.

Investors in proportion to their investments share the profits or losses. Mutual funds normally come out with a number of schemes, which are launched from time to time with different investment objectives. A mutual fund is required to be registered with the Securities and Exchange Board of India (SEBI) before it can collect funds from the public.

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How can I purchase or redeem MF?

Purchase - Login to your Net banking account, select the investment tab and proceed with the purchase option. Select category of scheme eg. Equity or Debt.

For mobile banking investors, you need to login to your mobile banking app, select investment option and then purchase the mutual fund.You can also visit the nearest branch if you need assistance in investing in Mutual funds.


Redeem - Login to your Net banking account, select investment tab, and proceed with the redemption option for the required fund transaction.

For mobile banking investors, you need to login to your mobile banking app, select investment option, then select redemption option.

You can also visit the nearest branch if you need assistance to redeem your funds.

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What is a Systematic Investment Plan (SIP)?

An SIP allows an investor to invest regularly. One puts in a small amount every month that is invested in a mutual fund. An SIP allows one to take part in the stock market without trying to second-guess its movements

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What is an Investment Horizon?

An Investment Horizon refers to the length of time that an investor is willing to hold the portfolio for. Investment horizon can be classified as following 

  • Short term: These are investments with a short horizon of 3 months to 2 years. You plan to use the money for a particular thing soon, for example, creating a reserve fund for unexpected spending.
  • Medium term: Investment with a medium-term horizon of 2-5 years. You know that you will need the money in a few years. It is also possible to choose products that correspond to this horizon
  • Long term: Investments with longer-term horizons – 5 years or more. On retirement, for children to study and other longer-term goals.  

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What is KYC and how to get KYC verified for mutual funds investment?

Know Your Client (KYC) registration is mandatory for all investor as per SEBI guidelines. KYC is being centralized through KYC Registration Agencies (KRAs) registered with SEBI. With this, each investor has to undergo the KYC process only once in the securities market and the details would be shared with other intermediaries by the KRAs.

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