Zerodha SIP Mutual Fund Investment In 3 Easy Steps
Last Updated: Jan -21-2020
Zerodha is one of the most popular discount brokers in India. Zerodha offers low brokerage trading options which are lucrative for active traders who wish not to spend money on commission charges. Despite being a discount broker, Zerodha offers mutual funds investment to its customers through a special platform named Zerodha Coin.
This allows customers to easily trade in various segments like currencies, stocks, derivatives as well as mutual funds. Moreover, all of this can be managed through a single demat account. In this article, we will discuss the various aspects of mutual fund investment through Zerodha.
The best part about investing in mutual funds through Zerodha is that Zerodha allows you to buy the mutual funds online directly from the asset management companies. Hence, you can save up to 1.5% and 1% on the annual commission charges. In addition, there are some more reasons why you must purchase mutual funds from Zerodha Coin.
- Zero fees, brokerage or commissions charged on investments
- Facility for lump sum and SIP investments
- Allows you to manage your SIP well. You can increase or decrease SIP values as per your need
- You can invest without any mandate requirement of ECS/NACH
- Invest online from anyplace at anytime
- Invest in multiple securities through a single trading account
- Consolidate all your investments in one demat account
Zerodha has a lot of offer to its customers, like they can purchase the mutual funds free of cost. There are no hidden charges or any other charges to buy the mutual funds. Similar to other brokers, zerodha charges exit loads. Exit loads are penalties by the asset management companies. The reason why these penalties are charged is to prevent the investors from premature withdrawals or redemption. The penalties differ from fund to fund and are also not applicable to all funds. You will be able to find the details of exit load applicable by Zerodha on their website.
Mutual Fund SIP by Zerodha
SIP stands for Systematic Investment Planning, which allows you to systematically invest in a particular fund. SIP is initiated with a definite amount for a definite time period. The fixed amount can be invested weekly, monthly, or even quarterly. SIP can start from as low an investment as Rs 500 and holds multiple benefits for the investor.
- Allows investor to invest in smaller amounts
- No requirement to study the market scenario
- The amount can easily be debited from the bank account whenever required
- Beneficial for short-term and long-term wealth creation
- Beneficial for new investors who wish to invest in equities
- Brings discipline and a habit of systematic savings
- You can set financial goals for yourself and easily achieve them
You can easily invest in a SIP through Zerodha without having to pay any additional charges. This can help you save up to 1.5% annually on charges and commissions, which is considerable as compared to the other stockbrokers. Zerodha allows its customers to invest in equities through SIP; however, there is no provision of investing in SIP in stocks directly through Zerodha platform kite or coin.
Here are three simple steps to start a Mutual Fund SIP with Zerodha:
- Login on to the Zerodha Coin platform. On the homepage, you can find a search bar wherein you type the name of your fund or fund house.
- Once the required fund page opens, click on ‘Direct SIP’ option.
- In the order window, enter all your investment details like investment amount, frequency, instalment, and the total number of instalments.
Once you are done with entering all the required information, simply click on ‘Start SIP’ and then ‘Confirm’.
Congratulations! You have successfully started a SIP.
Zerodha does not follow the conventional SIP models for all the funds. All the SIP orders are clubbed together by Zerodha Coin. Unlike the traditional SIPs, the lump sum of all orders becomes actual investment. There is no need to submit an ECS/NACH mandate every time you make an investment.Presently, the possible investment dates are 1st, 5th, 10th, and 15th of a month.
There are some funds for which Zerodha follows the traditional SIP process. These funds are generally the ones that do not take lump sum money because of the presence of excess funds.
Needless to say, Mutual Funds SIP investment is the best way to invest in the equity markets. It is a safe means of investment for those who are new to trading and lack sufficient knowledge about the trading market. It works best for those who have a low budget for investment and low risk appetite. These people can make use of Mutual Funds SIP and gain monetary benefits.
Mutual Funds SIP allow customers to invest over a long period of time, which rules out the possibility of market fluctuation. Customers need not worry about the market fluctuations and can systematically invest for optimum wealth creation in the future. SIPs help the investor to create funds for future goals like purchasing a house or car, marriage, child’s education, retirement, and more.
Mutual Funds SIP is ideal for freshers who have just started their career and wish to save their earnings in the right way. Mutual Funds SIP offers better returns than bank deposits and helps develop a financial discipline in life.
Unlike the conventional SIPs, Zerodha does not collect the ECS/NACH mandate which is needed for SIP auto debits from bank accounts. Due to this, Zerodha Coin does not provide the auto debit facility. The funds from your trading account are used to pay for your SIP. If you wish to automate your SIP payments on Coin platform, you can give required standing instructions to your bank stating that a particular amount should be credited to your Zerodha trading account every month. This will automate the process of instalment payment.
In case you are looking to get started with stock market investments or looking at transferring to a new brokerage company? let us assist you in taking the next steps ahead.
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