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Learn » Using FundsIndia » Using value-added features » Flexi SIP

Flexi - SIP

Description

Flexi SIP allows an investor to change the investment amount� on a monthly basis. An investor could use it to change the amount based on their affordability or they can choose to invest more or less depending on their understanding of market conditions. While setting up a Flexi SIP, an investor will be required to specify a regular amount and a maximum amount of investment per month. The monthly investment can thereafter vary from the minimum required for that mutual fund scheme and the user specified maximum amount. The investor can change the amount on a monthly basis, but is not required to do so. If the investor chooses to not make any changes, the regular amount as specified while set up will be used in a given month.

Advantages

As the name suggests, the main advantage of Flexi SIP is the flexibility of changing the monthly investment amount. Other than that, it works very similar to a regular SIP.

When to use

Flexi SIP is ideally suited for two different kinds of investors for different reasons:

1. A beginning investor - an investor who is just starting with systematic investing can use the Flexi SIP. Such an investor is typically not sure of the amount of savings they will be able to generate on a monthly basis. A simple, regular SIP will tie them into an investment of a specific amount every month. With Flexi SIP, they can increase or reduce the monthly amount to suit their affordability.

2. An advanced investor - an advanced investor might want to take advantage of market conditions to increase or decrease the monthly SIP amount. If they feel the market is too high in a month, they can reduce the SIP installment amount. If they feel that the market is undervalued, they can increase it. This would enable them to potentially get a better average market price for their investments.

How to setup

1. Login to your account, and click on 'Mutual funds' from the top bar
2. Select 'SIP setup' from the left menu
3. Click on 'Add a Flexi SIP' in the Flexi SIP section
4. In the next page, first, you will be asked to select the investor whose name the folio will be on.
5. After that, you can select the number of installments for this SIP - this refers to the number of months the SIP is scheduled to run. Typically investors choose anywhere between 12 months (1 year) to 120 months (10 years). You will also be asked to specify the bank account to use for the debits.
6. Then you can choose one or more schemes and the amount of money per month you want to invest in each of these schemes. You can also specify the monthly date of investment for each of these schemes.
7. While specifying the amounts, you will need to specify a regular amount and a maximum amount for each of the scheme. The amount of investment every month can go up to the maximum, and in the case the SIP is left untouched, the regular SIP amount will be invested.
8. The next page will ask you to confirm the details of your SIP setup. Please verify the scheme(s), amounts and the date to confirm. After this page, you will be taken to the netbanking system to complete the payment for setting up your Flexi SIP folio(s) by making an opening investment for the folio.
9. In this page, you can also choose whether you want FundsIndia to send you the ECS mandate form for your signature, or if you would like to send it yourself.
10. If you choose to send the form yourself (faster to process), you can select that option and hit 'Confirm'. Your ECS form will be generated and be made available in the 'Downloads' section of your account.
11. If you choose to request FundsIndia to send the form, we will do so at the end of the business day to your registered address.
12. That's it, the Flexi SIP setup in FundsIndia is complete!

Monthly Process

For Flexi SIP, an investor can choose whether to intervene in a particular month or not. If the investor chooses not to do anything, the regular SIP amount as specified in the Flexi SIP setup will be debited and invested in that month. If the investor chooses to change the amount, they have to follow a simple process as below.

The investor would need to login to their account seven days prior to the date of their SIP, and go to the SIP setup page. Using the 'Edit SIP' link next to the Flexi SIP entry, the investor can change the amount of investment to be made for that month.

Please note, however, that this change will be effected only for that particular month. The next month, the SIP amount will revert to the regular SIP amount.