There are many advantages of starting an SIP (systematic investment plan) in our mutual fund schemes. An SIP provides benefits of rupee cost averaging, disciplined investing and is lighter on wallet. The minimum investment amount for SIP differs from AMC (asset management company) to AMC.
We start SIP in our mutual funds for a fixed number of instalments over a specified period. Anil Agarwal, managing director, Agarwal & Associates—Mumbai-based insurance & investment consultant firm, said, “The minimum period of an SIP in schemes is usually six months. To get the advantage of an SIP, it is advisable to have a minimum time frame of at least five years, till the end of which you won’t touch your money.”
But, what happens when the existing SIP expires? Will you be given an option to renew the same or do you need to start with a fresh SIP?
At the end of the term, you have an option to renew the SIP of your MF schemes to ensure continuity. You usually get a reminder from the AMC to renew your SIP. You can decide whether to renew your SIP or not based on the returns of the scheme during the SIP tenure.
Mr Agarwal added, “SIP renewal form can be downloaded from the respective AMC website. Fill in the details and submit it to the nearest AMC office or to the registrar & transfer agents branch office—Karvy Computershare and Computer Age Management Services. You can also renew your mutual fund SIP from your distributor or the IFA (independent financial advisor).
If the existing folio is not KYC (know your customer) compliant, then you need to submit a copy of the KYC acknowledgement with the renewal instruction.
Pankaaj Maalde, head-financial planning, ApnaPaisa.com, said, “At the time of renewing the SIP, you can change the instalment amount, date or frequency of investing. You can give the ECS (electronic clearing services) mandate from a bank account that is different from the earlier one.”
To ensure an uninterrupted investment, send the renewal instruction at least 30 working days before the last date. If the existing SIP expires, the renewal can be done by quoting the same folio number. It will take 21-30 days from the date of sending the form for the SIP to start.
Harshad Chetanwala, head-sales, Quantum Asset Management Company, said, “Originally SIP renewal was processed offline. For offline SIP renewal, investors have to submit the ECS auto debit mandate form to the AMC with the date for renewal of SIP. In the last one or two years, the option of renewing the SIP online is also available to those investors, who have activated SIP through the online platform and/or the offline mode, mandated by the respective AMC.”
The SIP registration process could differ for each AMC. In Quantum Mutual Fund, SIP can be renewed by existing offline investors as well as investors who have invested through the online platform. If you initially had an offline SIP under an offline folio (which has ended) and wish to renew the offline SIP through online mode under the same folio, then you first need to convert the offline folio to the online mode on the basis of PIN which can be easily obtained online. The PIN will be sent to the investor’s registered email ID with the AMC and the investor can then map the offline folio/s and register for the SIP renewal online as follows, explained Mr Chetanwala.
Process for registration
The existing online and offline investors who have converted their folios online as mentioned above need to login with their user ID, select the folio (in case of multiple folios). Then select the online SIP option for registration/renewal of SIP and select the scheme, frequency, period of SIP, amount, etc. Investors will then be allotted the Unique Registration Number (URN No.) online. The same needs to be registered by the investor by logging into his banks website and selecting Quantum Mutual Fund as the biller.
Thus, we believe the process of subscribing for and renewing SIPs is much easier online than offline, added Mr Chetanwala.