A systematic investment plan or SIP is a method of investing in mutual funds where an investor opts for a mutual fund scheme and invests in it at fixed intervals. A SIP investment plan works by investing a small amount of money over time rather than investing a one-time huge amount that could result in higher returns.
Now that we understand the meaning of ‘what is SIP investment’, here is how they operate. Once you opt into a systematic investment plan, the amount will be automatically debited from your bank account and reinvested in a mutual fund that you purchase at some predetermined time interval. By the end of the day, you will be allocated units of your mutual fund that depend on its net asset value.
With every investment into a SIP plan in India, any additional units will be added to your account as per the market rate. With every investment that is made, the amount that you reinvest will be larger in addition to any of the returns that you see on those investments. The investor decides whether or not to receive the returns at the end of the SIP’s tenure or at any periodic intervals. Let’s try to understand this better using an example.
Assume that you want to invest in a mutual fund of your choice. Accordingly, you set aside a sum of ₹1 lakhs to invest in the same. There are two ways in which you can choose to make this investment. You can either make a one-time payment of ₹1 lakhs in the mutual fund of your choice, which is known as a lump sum investment. Alternatively, you can choose to invest using a SIP. The steps will be as follows:
Yes, the Demat account opening is free of cost. However, there a few additional charges.
Account opening with Angel One is a 100% paperless process. Following are the documents that are required for opening an account.
Following are the types of account that you can open with angel broking
Any individual who is a resident of India with the required proof of identification, proof of address, proof of income can open a demat account to purchase and sell securities and other instruments through the stock exchanges in India.
Yes, an NRI can open a demat account; however, rules of FEMA – Foreign Exchange Management Act will be applicable.
As per Reserve Bank of India (RBI), an NRI can only own up to 5 % of the paid – up capital in an Indian registered company. An NRI can invest in IPOs – Initial Public Offers, however, it is based on a repatriable basis using the NRE demat funds through their NRE (Non-Resident External) Rupee bank account. Nevertheless, if the NRI invests on a non-repatriable basis, then their NRO (Non-Resident Ordinary) Rupee account and NRO demat account will be operated.
Through the PINS – Portfolio Investment Scheme an NRI is permitted to transact in shares and mutual funds through their account in India.
Yes, nomination facility is available in demat account.
It is advisable for all individual beneficial owners to avail of this facility. Resident Individuals, NRIs presently having or opening new accounts either singly or jointly can appoint a nominee. If the account is held jointly all the joint account holders are required to sign the nomination form. The nomination can be changed or updated as and when required. However, Non-individuals including society, Karta of Hindu Undivided Family, Trust, corporate body or holder of power of attorney cannot nominate.
Yes, multiple demat accounts can be opened by an investor. An investor can open more than one account in the same name with the same DP as well as with various other DPs. However, for all accounts, the investor is required to strictly comply with the KYC regulations and provide Proof of Identity, Proof of Address and other documentation proofs as stipulated by SEBI. The PAN card of the investor is mandatory and is required to be furnished at the time of setting up the account.
Yes, a demat account can be opened jointly. However, a demat account can have a maximum of three account holders that is one main holder and two joint account holders
Yes, a demat account can be transferred from one DP to another DP. The investor is required to submit the transfer or closure request to his DP in the prescribed form. The said DP would transfer all the securities and investments presently in the account as per the investor’s instructions to the new DP account.
An investor is given the option to apply for and obtain the shares of an IPO in physical form. However, it is suitable to apply for an IPO through the demat form since the shares issued through an IPO are tradeable only in form
No, a demat account is mainly for the transaction of shares on the stock exchange. Mutual fund investments of any kind including SIP can be carried out directly by the investor or through a bank or financial institution.
Demat account stands for the dematerialised account used for holding any form of financial securities in electronic format. Investors use a Demat account to hold equity shares, bonds, debentures, mutual funds, ETFs, government securities, and more. It facilitates managing and monitoring all financial securities in one place and quickens the buying and selling process.
Mutual fund investors have the option to transfer MF units to a Demat account. It simplifies the process of managing all financial securities in one place.
Investors can apply to convert mutual fund units into Demat format by availing a conversion request form from the broker or depository (CDSL or NSDL)
Demat account, as such, doesn’t hold money. If you have linked your bank account with the Demat, then the sales proceeds of an asset from the Demat account will be credited directly to your bank account.
To receive delivery of IPO shares a Demat account is a prerequisite.
Investors can open a Demat account by submitting PAN, Aadhaar, Address and Identity proof, along with bank account details.
Since the whole process has become digital, one can open and activate a Demat account within 24 hours. Don’t miss an opportunity to apply for the best IPO offers. Get an Angel One Demat account today!