Best SIP Plan for Students to Invest

Today, times are changing. Financial awareness is widely gaining importance, as many people realize how vital it is to start investing early. When it comes to mutual fund investments , there is a common misconception that you need to have a highly paid job to become eligible for the process.However, the fact is you can start investing even when you're in college or pursuing management studies. Nowadays, many students are involved in freelancing or part-time jobs, along with their studies. As a student, you may spend that money on shopping, travel, movies, etc. But you can put your finances to better use by investing in a Systematic Investment Plan (SIP) in India. SIP is a method of investing in a mutual fund scheme. It is a fixed sum of money that you need to invest at fixed interval. You can start with as little as Rs.500 monthly. Later on, when you start earning more, you can increase the investment. Let's get to know how you can start SIP and the best sip plan to invest in.

StartingSIP is an easy process. You can also do it online without visiting any mutual fund office to begin your investment process. If you want to do it offline, below is the step-by-step procedure:

1. First and foremost, you need to have a PAN card to initiate any investment.
2. Make sure you are KYC compliant. You need to verify your KYC at your nearest mutual fund office, bank, or RTA. For this, you have to submit your identity proof, address proof, and a copy of the PAN card.
3. After completing the KYC process, you can invest in any mutual fund scheme from any fund house.
4. The next step is to register for SIP, visit the nearest financial broker or mutual fund office or asset management company (AMC) that will ask you to fill an application form with the required details.
5. Once you submit the form attached with the necessary documents, you will be given a user ID and password to make transactions online. At this time, you also need to decide the SIP amount. Provide the details of your bank account from which the amount can be debited automatically.
6. SIP amount needs to be a fixed sum that you can pay weekly, monthly, or quarterly. Set a date for the SIP debit amount. Make sure you select a date whenever your salary comes in.
7. After registration is complete, you have to select the right sip plan for your needs.
8. The selection of a sip plan can be confusing. If your risk tolerance is high, then you can opt for equity-linked assets. If you have a low-risk appetite, then you can choose either debt or hybrid mutual funds.

As a student, starting investment early means you get ample time to make a long-term commitment. With a SIP plan, you can start investing majorly in small or mid-cap funds. The risk factor may be high, but the growth potential increases as these funds grow faster. Once the fund performs well, it will help you earn more returns. With a long investment horizon, you will be able to save a large amount that you can use to sponsor your studies, purchase a two-wheeler, or any other financial goal.

SIPs are one of the best plans for students in India because investors can initiate, pause, or terminate the account whenever you wish to. Moreover, it attracts no cost or penalty. The investment objectives may vary, but when you're thinking of the best sip plan to invest, you need to assess the following parameters:

1. Risk and Market Volatility While choosing the best sip plan to invest , you should gauge your risk appetite. It is possible when you try to balance out the market volatility. Risk and returns are proportional. Pick the funds based on your risk tolerance level.
2. AMC and Fund Managers Before selecting a plan, you should check for the history of the Asset Management Company (AMC) and the fund manager's profile. It is always advisable to select an expert fund manager who allocates assets so that investors achieve maximum profit. After all, the experience and background of the fund manager matter in making or breaking your investment.
3. Evaluate Returns The sole purpose of mutual fund investment is to earn maximum returns. As long as you're invested in a scheme, you will be able to get high returns. By carefully analyzing the returns and performance, you can find the best sip plan to invest in India.

As a student, you can benefit from a SIP plan in many ways. It helps to reduce risk, earn great returns due to the compounding effect, build a good corpus for future goals, and a healthy investment habit. If you're a student who is looking for mutual fund investment, then SIP is the best way to earn good returns affordably.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.