One of the easiest ways to invest in the stock market is through a Systematic Investment Plan (SIP). SIPs provide a disciplined approach to wealth creation and allow investors to make regular investments. Investment in SIP can done by choosing a broker’s platform that provides the SIP feature and has other features that would simplify the investment journey. With the help of the below article, you’ll be able to understand how to choose the best app for SIP investment and begin your disciplined investment journey.
Understanding Systematic Investment Plans and their Benefits
Before we look into some of the key features that every SIP investment app must have, let us quickly understand what an SIP is. SIPs allow an investor to contribute a fixed amount regularly in mutual funds. This method not only helps the investor become financially disciplined but also helps to average the cost of investment over time. This allows investors to reduce the impact of market volatility on their investments. SIPs are particularly attractive for new investors as they allow them to start investments with small amounts and gradually increase them over time. The compounding effect has an impact on the invested amount, as the returns are reinvested.
Features that a SIP Investment App Must Have
To make the most of your SIP plans, your SIP investment app must have the features mentioned below.
- Easy-to-Use Application
The broker must provide investors with an easy-to-use app that helps investors navigate through various options such as fund selection, fund transaction history, portfolio tracking, and place buy and sell orders. Additionally, these apps must have simple dashboards and instructions that help new investors to invest with SIPs.
- Access to Reports and Calculators
The app must provide tools that would help investors analyse fund performance and track market trends. Most apps also have SIP calculators, using which, investors can calculate their potential returns based on their invested amount.
- Investment Options
The app should provide a range of mutual funds across different categories such as equity, debt, hybrid, and sectoral funds. This variety allows investors to have a balanced portfolio that suits their risk appetite and financial goals.
- Low or No Charges
Some applications charge a transaction fee or account maintenance charges. To increase the total returns on your investment, it is important to reduce these frequent charges with apps that charge minimal to no fees.
- Customer Support
Having customer support that helps you overcome your investment-related problems is a must. Look for apps that provide multiple customer support options such as chat, email, or phone assistance to resolve your queries or issues swiftly.
- Security
Security must be the top priority when it comes to financial transactions. Make sure that the app has strict security measures such as two-factor authentication and secure payment gateways. Only with this, will investors be able to protect their investments.
Common Mistakes that Every Investor Must Avoid with SIPs
When investing through a SIP app, you must be careful and avoid the below-mentioned mistakes.
- Ignoring the Fund’s Historic Performance: Be sure to review the past performance of a mutual fund before starting your SIP.
- Ignoring Diversification: New investors must avoid investing all their capital in one fund. This is because diversification of capital can balance out the overall risk.
- Reacting to Market Fluctuations: SIPs are attractive due to their “Rupee Cost Averaging” feature. Thus investors must trust their investment strategy rather than making impulsive decisions based on short-term market fluctuations.
Steps to Starting Your Investment Journey
The below-mentioned steps will help you begin your investment journey with SIPs.
Step 1: Choose a broking app: Select an application that satisfies your investing requirements.
Step 2: Register and Complete the KYC Procedure: Investors simply have to include their name, email address, phone number, and PAN while signing up for the app. Investors must complete the Know Your Customer (KYC) process by providing proof of identity and proof of address.
Step 3: Selecting Appropriate SIP Plans: Research the several SIP plans offered by the app, select the one that suits your financial objectives, and determine the investment amount you wish to use.
Step 4: Regularly Track Your Investments: Regularly monitor your portfolio’s performance by visiting the app’s dashboard.
Conclusion
With SIP type of investment, investors can inculcate financial discipline. Selecting a good app for SIP investment can greatly help investors during their investing journey and help them achieve their financial goals. By understanding what Systematic Investment plans are, their features and the benefits of a SIP investment, and avoiding common mistakes made by most people, investors can make informed decisions. Furthermore, choosing the right broking app, selecting an appropriate SIP plan, and regularly tracking your investments can potentially maximise long-term gains.
