Mutual Fund Systematic Investment Plan or SIP refers to the process where the investor has to invest a particular amount of money in the same mutual fund scheme, over a fixed period of time intervals. These time intervals are predefined by the investors who can be individuals, firms or companies interested to invest in Mutual Funds via non-banking financial institutions. SIP is a very commonly used scheme that can also be availed through online processes. While most investors are interested to know how to invest in SIP online, most are not aware about the pros and cons of the online process. Online SIP requires a DEMAT account from the investor. It also requires the Know Your customer forms to be duly filled with your investment banks and the enabling of net banking from your DEMAT accounts. However, herein lays the cons:
- The personal information of your DEMAT account or the security pin are never to be shared with anyone, even at your banking services.
- The phone number that has been registered with your DEMAT account will be required to fill in OTPs and hence you should make sure you have the number active.
- One must make sure their private information is safe from hackers and must double check security calls and messages.
- The amount of investments and accounts statement should be kept in utmost privacy.
- Once you stop investing, the account must be duly closed with proper notification to the investment bank.
- The investments and online transactions must be kept under regular check.
Online SIP is now a very commonly used process of Mutual fund investment but one must always be careful while choosing such a plan and providing the confidential information online to either the investment banks or the companies.