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FAQ's |
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| 1. |
Why should we invest systematically? |
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Just as drops of water make an ocean, small but regular investments can go a long way building wealth over time.
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As individuals, our financial goals like obtaining income to meet financial needs like saving for child’s education, marriage or for a comfortable retirement & a secure financial future can be met by means of a regular SIP.
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Additionally, the SIP investment has the benefits of compounding and rupee cost averaging inherent in it.
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| 2. |
What is the Power of Compounding? |
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An extended investment period always helps one accumulate more wealth due to the power of compounding. An early investor accumulates more than one who comes in later.
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The illustrative example demonstrates what Rs. 1000 invested every month accumulates to over a period of 30 years.
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No of Years |
Amount Invested |
Rate of Returns |
10% |
15% |
20% |
5 |
60,000 |
76,561 |
86,331 |
97,216 |
10 |
1,20,000 |
199,864 |
259,973 |
339,119 |
15 |
1,80,000 |
398,444 |
609,229 |
941,053 |
20 |
2,40,000 |
718,259 |
1,311,707 |
2,438,856 |
25 |
3,00,000 |
1,233,325 |
2,724,642 |
6,165,871 |
30 |
3,60,000 |
2,062,843 |
5,566,559 |
15,439,875 |
| (Indicative returns at various assumed rates of growth, compounded annually) |
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| 3. |
What is Rupee Cost Averaging? |
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Market fluctuations affect cost of investments.
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SIP gives the investor the option to invest at various points in time which helps average out the cost of acquisition of units. Thus the investor gains freedom from timing the market.
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The illustration below shows how the Investor ‘A’ acquires more units through SIP as against Investor ‘B’s’ lump sum investment.
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Also, A now has 2046.60 units bought at an average price of Rs. 8.79 as against B’s purchase price of Rs. 9 per unit.
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| Comparison between Lumpsum Investment vs. SIP |
| A’s SIP Investment |
B’s Lumpsum Investment |
| Month |
Sale Price |
Units |
Amount (Rs.) |
Units |
Amount (Rs.) |
| Jan 1 |
9.00 |
3,000 |
333.30 |
18,000 |
2,000.00 |
| Feb 1 |
9.50 |
3,000 |
315.80 |
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| Mar 1 |
9.00 |
3,000 |
333.30 |
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| Apr 1 |
8.60 |
3,000 |
348.30 |
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| May 1 |
8.00 |
3,000 |
375.00 |
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| Jun 1 |
8.80 |
3,000 |
340.90 |
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| Total |
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18,000 |
2046.60 |
18,000 |
2,000.00 |
| Average Cost of Acquisition |
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8.79 |
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9.00 |
| (The figures of sales price are hypothetical and are for illustrative purposes only) |
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| 4. |
What is a Systematic Investment Plan (SIP)? |
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A Systematic Investment Plan (SIP) is a disciplined approach to wealth creation. It allows the investor to adopt a systematic and dedicated approach to financial planning by inculcating a regular savings habit.
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Instead of investing a large amount at one time, the investor can choose to stagger his investment at regular intervals according to his convenience and ability.
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| 5. |
UTI MF-SIP – What is it? |
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| 6. |
How does SIP work? |
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UTI MFs-SIP enables you to invest a pre set amount in the scheme of your choice on the applicable NAV of each transaction date.
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Each transaction will fetch you additional units that will be added to your investment account, thereby helping you build your investment at regular intervals.
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A statement confirming transaction and allotment of units for each transaction will be posted to you.
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| 7. |
How does one start a SIP? |
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For existing investors: |
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To start a SIP, the investor needs to fill a SIP enrollment form stating the mandate for the SIP.
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The first installment needs to be made by cheque followed by chosen mode of payment for each successive SIP installment.
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The enrolment form needs to be submitted at least 1 month before the first SIP installment date.
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For new investors, in addition to the above, a scheme application form also needs to filled in. |
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| 8. |
At what frequency do the installments have to be paid? |
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- SIP is offered with following periodicity: Monthly (MSIP)/Quarterly(QSIP)
- Separate enrollment forms need to be filled to avail both options.
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| 9. |
How does the purchase of units take place each month? |
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Units will be allotted at NAV based sale price declared on the applicable dates i.e. 1st or 7th or 15th or 25th of the month.
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In case the date falls on the non-business day or fall during a book closure period, the immediate next business day will be taken into account for the purpose of determining the price.
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| 10. |
Is there an entry/exit load? |
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- All SIP installments are subject to entry & exit loads as applicable in the scheme.
- There are separate load structures for SIPs in the schemes UTI Children’s Career Plan (Balanced) (UTI-CCP) & UTI Retirement Benefit Pension Fund (UTI-RBP).
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| 11. |
What is the minimum investment? |
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Currently SIP is offered in the monthly option & the quarterly option. The minimum investment under SIP is Rs.500/- (for monthly option) and Rs.1500/- (for Quarterly option) for all schemes.
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However investors desiring to start a SIP in a Dividend Plan of any of the debt schemes are required to have a minimum investment of Rs. 5000 to start the SIP. Each SIP cheque can be of a minimum of Rs. 500 or more in multiples of Re. 1.
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| 12. |
Can I invest on any date of the month? |
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- The SIP cheques must be dated 1st, 7th, 15th, or 25th of the month.
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| 13. |
How can the SIP installment payment be made? |
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- The SIP installment may be paid either by Post dated Cheque/s, Auto debit, or ECS. The desired option needs to be selected at the time of enrolling for SIP.
- All SIP installments should be of a uniform amount.
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| 14. |
How does once enroll for the Electronic Clearing Service of the RBI for monthly debit of SIP installments? |
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Currently SIP payment through Electronic Clearing Service (Debit Clearing) of the RBI is offered only to the investors having bank accounts in select cities.
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It is mandatory to submit the copy of a cancelled cheque leaf along with the ECS Debit form.
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The investor’s bank particulars in the scheme application form and the bank particulars in ECS Debit form should be the same.
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| 15. |
Must I state for how long I want the SIP? |
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There is no stipulated period up to which a SIP account can be under operation. However if no period is specified, the default option is “till further notice”.
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Investors can choose to discontinue this facility by giving 1 month’s notice to the Scheme’s registrar.
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| 16. |
Is SIP offered in all funds? |
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- SIP is offered in most UTI MF schemes.
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SIP Presentation |
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Brochure |
SIP Calulator |
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SIP Online |
[Top ] |
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Disclaimer:
All investments in mutual funds and securities are subject to market risks and the NAV of the funds may go up or down depending upon the factors and forces affecting the securities markets. There can be no assurance that the scheme's objective will be achieved. Please read the offer document carefully before investing. Do consult your Investment Advisor before investing.
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