Frequently Asked Quetions On Systematic Investment Plan

Jan 12th, 2010
by admin.
1. What is an SIP?
2. Is it a unique approach to deploy savings?
3. Why is investing in a systematic manner appropriate for most investors?
4. What are the main advantages of SIP as an investment tool?
5. How does an SIP work under different market conditions and over time?
6. What is timing the market?
7. What are the benefits of starting an SIP early? Why?
8. What is the power of compounding?
9. What is Rupee cost averaging?
10. Does it help to time the SIP period?
11. If an investor has a lump-sum and wishes to do an SIP, what is the optimal way?
12. What is the minimum amount and tenure for investing through SIP?
13. Is SIP available for all the categories? Equity / Fixed Income / Liquid?
14. Can I redeem the money before the tenure?
15. If I redeem the amount in between, will the SIP stop with immediate effect or it will continue till the specified period mentioned?
16. Will I be charged an entry load every month?
17. Can I choose any dates in the month for SIP?
18. Can I opt for ECS?
19. What is the time gap between giving the first cheque and subsequent cheques?
20. Should the monthly installment be of same amount?
21. Can I switch the amount to another scheme before the tenure? Will the SIP continue in the old scheme or new scheme?
22. Will the units allotted to me differ every month?
23. If I start an SIP in the dividend option of a scheme, will I get dividends even before the tenure completes?
24. What is the procedure if my cheque bounces or I don’t have balance in my account at the time of clearing? Will my SIP still continue for the next month?
25. Will I get any communication on the cheque bounce? Should I give another cheque?
26. Will I get the transaction confirmation either through email or sms every month?
27. Can I do online transaction for SIP? If so, Should I do it month on month?
28. Can I reduce the tenure / amount of SIP in between? If I have opted for 20 years SIP and suddenly in the 15th year of investment, I don’t want to continue for the next 5 years, can I stop it immediately?
29. Can I give third party PDCs for investing in my name?
30. Is KYC required, if my investment touches Rs.50000/- during the SIP tenure?
31. Can I have different dates for SIP in same scheme? For Ex: If I am investing Rs.2000/- in a scheme on the 7th of each month for 20 years, suddenly I wish to start another SIP for Rs. 3000 in the same scheme for 20 years. My first investment SIP clears on 7th of every month, can I opt for 20th of the same month for my second investment?
32. Can I pledge these units in the bank before the tenure completes?
33. Can I claim tax rebate if I put an SIP in an ELSS schemes? If the lock in period is for 3 years, can I redeem the entire amount invested in the first year after the lock in period or every month SIP will be locked for 3 years?
34. Many fund houses are coming up with SIPs & insurance, is it as similar as ULIPs?
35. If I invest through a distributor and subsequently change my investment to direct, will there be any impact on my investment? Will I be charged an entry load for the future?installments also?
36. If I have not provided my nominee or my bank account details and suddenly during the SIP tenure, if I die, what is the status of my investment?
37. Can I opt for daily SIP? Or only monthly intervals allowed?
38. Will I get monthly reminders before my SIP date?
39. Once my SIP tenure completes, will I be given an option to renew or should I again begin the procedure as fresh investment?
40. What is the percentage of return, I can expect? Will I get more than lump sum investment?
41. Can I invest in my child’s name and be a guardian for him? On his attaining maturity, should the investment be revised and to be signed by him?
42. Can I change the bank mandate from which the SIP amount is currently going to my Child’s bank account (after child’s maturity)?

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