3 simple ways to financially plan & manage your SIP investments

Systematic Investment Plans, popularly known as SIPs, has gained a popular ground among mutual fund investors. It is said to be the best investment plan among the other for the perks it brings. Moreover, it is probably the safest way to invest periodically in the fund market. Now, with the availability of SIP calculator, one can preset his amount of investment and assess returns based on the same. A SIP calculator allows one to have a fine idea about the investment and its return over a specified period of time.

However, before one can proceed with SIP investment, it is extremely important to know how it works. Many people have no idea about the processes of investing in SIP, how to take help of a SIP calculator or how to actually start investing. One more reason to research is that a person needs to calculate SIP returns so that his investment does not go without prior planning. There are a few necessities before beginning with the process-

  • Prepare all the documents that are likely to be used in the process of a mutual fund. These documents include PAN card, address proof such as a driving licence, passport size photo, cheque book, and other personal details.
  • KYC or Know Your Customer is another mandatory step to comply with. KYC is one of the most important requirements for the verification of the investor before he can do any investment in mutual funds. There are many fund collectors who provide online KYC facilities as well, known as eKYC.
  • Filling of the form and uploading a soft copy of your photo is the next step. After this, there will be a video call that will be held for a face-to-face confirmation.

Once all the formalities are done, a person can finally open an account for mutual funds. All one needs to have is the basic knowledge besides setting a target based on the assessment done using a SIP calculator. Although you can always take financial advice, your decision based on diligent research is the most important part. Here are three steps on how you can plan and manage your SIP investment without any issue.

1.  SIP to goal

Before any type of investment, a goal is one of the most basic things that one should set. On the basis of the set aim, you can invest a particular sum for a period. One the other hand, when there is no goal, your plan may fall in the abyss. While speaking of the aim, you must know whether you are going to invest for a short term, medium-term or long term. Also, setting an aim will help you maximize your gain. It is always recommended to forecast and estimate your returns based on your goal. A SIP calculator is a handy tool that helps with this.

2.  Invest at a fixed rate

The amount of investment matters a lot in case of SIP. Since most people step back because of the lack of capacity to meet the target amount, make sure you are not one of them. Even if you think that the prescribed monthly SIP is out of your pocket, you can try and make it up. Monthly savings would be an ideal choice as the minimum amount SIP investment is generally affordable. Moreover, SIP allows you to invest a specific amount every month, and you can opt to increase your investment as soon as your income rises. You can calculate your returns based on tenure, interest rate and other factors using a SIP calculator.

3.  Determine the flow of cash

It is important that you have control over your cash flow since SIP depends on the same. Many people, especially salaried ones know when they receive their salary and hence they prefer to set ECS (Electronic Clearance Service) to their bank.

With the above measures, you can enjoy healthy results with your SIP investment. Also, it would be much better to increase your sum of investments as soon as your earning goes up. Always keep a keen eye on the returns and plan your further investments accordingly.

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