All You Need To Know About SIP In Nepal

Systematic Investment Plan (SIP) is a popular investment option that has gained a lot of traction in recent years. It is a method of investing a fixed amount of money at regular intervals in a mutual fund scheme. SIP has become a preferred investment option for many individuals who want to grow their wealth in a disciplined and systematic manner. In this blog post, we will explain the concept of SIP in simple terms and how it works.

What is a Systematic Investment Plan (SIP)?

A Systematic Investment Plan (SIP) is a method of investing money in mutual funds in a regular and disciplined manner. In simple terms, it is a way of investing a fixed amount of money in a mutual fund scheme at regular intervals, such as weekly, monthly, or quarterly. , which accumulate over time and lead to significant wealth creation.

How does SIP work?

SIP works on the principle of rupee cost averaging. It means that investors buy more units of a mutual fund when the market is down and fewer units when the market is up. By investing a fixed amount of money at regular intervals, investors can take advantage of the market's volatility and benefit from the power of compounding.

Advantage of Systematic Investment Plan (SIP):

Disciplined Investing: SIP encourages investors to invest regularly, which inculcates financial discipline and helps them achieve their long-term financial goals.
Cost Averaging: With SIP, an investor can buy units of a mutual fund at different price points, averaging out the cost of their investments. This helps reduce the impact of market volatility on their investments.
Flexibility: Investors can start with a small amount and gradually increase the investment amount as their income grows. Also, they can stop or pause their investments at any time without any penalty.

Disadvantage of Systematic Investment Plan (SIP):

Market Risk: SIP doesn't guarantee returns and is subject to market risks. If the market falls, the value of the investment may also decrease.
No Control over Investment Decisions: In SIP, the investment decisions are taken by the fund manager of the mutual fund. Investors may not have control over the selection of individual stocks and bonds that make up the mutual fund's portfolio.

How you can start SIP?

To start a SIP, investors need to choose a mutual fund that suits their investment goals and how much risk they are willing to take. They also need to decide how much they want to invest regularly and how often. Once they've decided, they can tell their bank to automatically take that amount out of their account and invest it in the mutual fund they picked.

SIP Available in Nepal

There are six open-ended mutual funds in Nepal:-

· Siddhartha Systematic Investment Scheme (SSIS)

· NMB Sarak Bachat Fund- E (NMBSBFE)
· NIBL Sahabhagita Fund (NIBLSF)
· NIC Asia Dynamic Debt Fund (NICDDF)
· Subha Laxmi Kosh
· Nabil Flexi Cap Fund

Who can Start SIP?

Anyone who has a Demat Account can easily sign up for SIP (Systematic Investment Plan).

How Can We Register For SIP?

To register for a systematic investment plan (SIP) in Nepal, you can follow these steps:

1. Choose a mutual fund company that provides SIP services.
2. Select a mutual fund scheme that matches your investment goals and risk tolerance.
3. Fill out the SIP registration form, which you can get from the mutual fund company's website, office, or distributor.
4. Provide the necessary documents like your KYC details, identity proof, address proof, and bank account details.
5. Submit the application form and documents to the mutual fund company or their authorized distributor.

After your application is approved, your SIP will start, and the investment amount you chose will be deducted from your bank account on the specified dates. It's important to monitor your investments regularly and adjust your SIP portfolio if needed to match your changing investment goals and risk tolerance.

Document Required for SIP

· BANK A/C
· MERO SHARE A/C
· DEAMAT A/C
· Citizenship [ नागरिकता ] र
· KHALTI वा eSewa Account .

Payment Method of SIP in Nepal

You can pay for SIP online using various methods, such as

1. Connect IPS
2. Khalti
3. Esewa.

These are some of the commonly used payment methods for SIP in Nepal.

SIP Calculator

All the SIP calculators that use a same formula ( SIP Unit = (SIP Amount – Applicable Charges *) / applicable NAV ) to help you figure out how much money you'll make if you invest regularly over time. If you want to see how much money you'll make by investing $1,000 for 30 years on a monthly basis, you can use any of the calculators linked below. My favorite one is the first one because it has a really cool interface.

Is it possible to cancel a SIP anytime?

Yes, you can cancel a systematic investment plan (SIP) anytime. You just need to contact the company that manages your SIP and ask them to cancel it. You will need to give them some details about your plan, and you may also have to explain why you want to cancel it. But keep in mind that there may be some costs or fees for canceling your SIP, so it's a good idea to read your agreement carefully before you cancel it.

Conclusion

SIP is a disciplined way of investing a fixed amount regularly in mutual funds. It works on the principle of rupee cost averaging, allowing investors to benefit from market volatility and compounding. In Nepal, there are four open-ended mutual funds that offer SIP services, and anyone with a Demat Account can sign up. Payments can be made online using methods like Connect IPS, Khalti, and Esewa. SIP can be cancelled anytime, but there may be associated costs or fees. Overall, SIP is a suitable investment option for long-term wealth creation.

Np Education

Recent Post

All You Need To Know About SIP In Nepal

All You Need To Know About SIP In Nepal