Systematic Investment Plan


A SIP means Systematic Investment Plan. This is one of the more effective investment strategy for accumulating wealth in a disciplined manner over a long period. A specific amount will be invested for a chosen period at regular intervals.

For example, if an investor wants to invest Rs 12000 and makes a one-time investment at an NAV of Rs 15, 800 (12,000/15) units will be allotted.

In the case of a SIP, the investor distributes Rs 12,000 over a year and invests Rs 1,000 every month. The amount will be invested at different levels of NAV, as market conditions and level of indices keep changing on a day-to-day basis. The investment in 12 installments will get averaged at different NAVs in an automatic manner without the investor timing the entry point.

Systematic Investment Plan is not a unique approach in deploying savings. It is similar to a regular savings scheme like a recurring deposit with a bank where we can put small amounts at periodic intervals. Investing in a mutual fund through SIP allows participation in the equity markets systematically.

One-time investment is better only when there is a high degree of certainty that the market is going to go through a rising trend. Markets are volatile and predicting is very difficult; timing works only when exit and entry are in an investor's favor. If an investor invests a bulk amount on a day and the market declines, the investor may panic and withdraw the amount leading to a sizeable loss. Also for most investors, one-time investment may not be feasible due to a lack of resources. In the case of systematic investment, it is not necessary for the investor to accumulate a huge amount at one go before making an investment. He can accumulate small amounts and invest regularly. SIP also enables investors to start investing in equity early.

Power of compounding, rupee cost averaging and the option of investing small amounts regularly

When investing through SIP it is not necessary to time the market. Investments will be made systematically every month or quarter depending on the option. Since the investment amount will be uniform, units accumulated during a bearish market, will be more compared to the units in a bullish market.

To build a corpus over the long term requires an investor to stay focused, invest regularly and maintain discipline in the investment pattern. An amount as low as Rs 250 can be set aside every month. This will not affect the disposable income of the individual as well. Investing through the SIP mode ensures investing in all phases of the market. The investor will accumulate more units during a bearish phase and a lesser number of units in a bullish phase. This investor enjoys the benefit of rupee cost averaging under this method.

Timing of the market is an attempt to predict the market movements using fundamental and technical analysis. The basic concept in investing is buy low-sell high. Most of the investors who try to time the market tend to do exactly the opposite.

Investments are generally postponed. However, longer you leave the money invested, the faster it will grow. The investment starts to earn returns and these returns again start to earn money. Compounding being the tool that generally makes a small sum grow to large amount.

Compounding is the fact that the money you make off an investment can be reinvested to make even more money than your initial investment. The money you make goes back to work to make you even more money than before.

Sound confusing? It's actually pretty simple.

Say you've invested Rs.10, 000 and it makes 10% interest per year. In the first year, you make Rs.1, 000 in interest. But in the second year, you'll make Rs.1, 100 (not only does your initial investment of Rs.10,000 accrue interest but so does the additional Rs.1,000 you made in the first year). In the tenth year, you'll make Rs. 2,358. And in the 30th year you'll make Rs.15, 864. That's all without making another investment beyond your initial Rs.10, 000. In 30 years, the power of compounding gets you from making Rs.1, 000 per year to making Rs.15, 864 per year

One main benefit of investing through the SIP route is rupee cost averaging. When investment is done at regular intervals, units will accumulate at different market levels. When an equal sum is invested every month, the amount will get averaged based on the different NAV's

Date NAV Amount invested Units
7-Aug-2008 15 1000 67
7-Sep-2008 13 1000 77

The average rate at which the investment is made is at Rs 14. Hence units get accumulated at different market levels.

If the NAV during the end September is Rs 17, the value of Rs 2000 investment will be worth Rs 2448. If a person had considered bulk investing and invests Rs 2000 on August 7, the investment will be worth only Rs 226

The right time to start the SIP is now. The longer the SIP period, greater is the average annual returns. More over the percentage of positive and negative returns will decline considerably as the SIP tenure will cover all phases of the market. Even if the SIP is chosen for a shorter period, it is always advisable to renew it, once the tenure is over.

Even if an investor has a lump-sum amount, an optimal way of investing, is to put the amount in Sundaram Liquid Plus or Sundaram Money Fund which are liquid funds and allow switching to any of the equity funds for SIP. This ensures that the investment enjoys rupee cost averaging and at the same time earns a higher rate of return when compared to investments in savings accounts.

SIP can be done in weekly (every Wednesday), monthly or quarterly installments for open-ended Equity and Fixed Income Schemes of Sundaram Mutual Fund, taking into account that the total aggregate of such cheques & payment instructions is not less than Rs. 5,000/-.

Weekly: Minimum amount Rs.1000/- every Wednesday, Minimum number of installments 5

Monthly: Minimum amount Rs.250/- minimum number of installments is 20

Quarterly: Minimum amount Rs.750/- minimum number of installments is 7

1. Sundaram Growth Fund
2. Sundaram Tax Saver
3. Sundaram Select Focus
4. Sundaram Select Midcap
5. Sundaram S.M.I.L.E Fund
6. Sundaram Equity Multiplier Fund
7. Sundaram CAPEX Opportunities Fund
8. Sundaram Rural India Fund
9. Sundaram Balanced Fund
10. Sundaram Equity Plus
11. Sundaram Energy Opportunities Fund
12. Sundaram Financial Services Opportunities Fund
13. Sundaram Entertainment Opportunities Fund
14. Sundaram PSU Opportunities Fund
15. Sundaram Global Advantage Fund
16. Sundaram Monthly Income Plan
17. Sundaram Bond Saver
18. Sundaram Gilt Fund
19. Sundaram Select Debt Short Term Asset Plan
20. Sundaram Flexible Fund Flexible Income Plan
21. Sundaram Flexible Fund Short Term Plan
22. Sundaram Ultra Short Term Fund

Investment through the SIP route can be done only in the case of equity and fixed income funds. For liquid funds only bulk investment is possible

With the exception of ELSS (Equity Linked Savings Scheme) funds or tax-saving funds, which have a lock-in period of three years, investment in other funds can be redeemed before the tenure. All SIP installments in ELSS funds have a three year lock-in period.

Redemption of the amount during the SIP period will not amount to stop of SIP. SIP will continue unless the investor specifically requests to stop the SIP by means of a written and duly signed request.

Entry load on funds will differ from fund house to fund house. If there is entry load, then the same will be applicable for each SIP transaction. There will be no entry load for direct applications received by the asset management company or collection centres/investor service centres that are not routed through any distributor/agent/broker.

No entry and exit load will be applicable on dividend reinvestment and for bonus units.

There are specific dates for investment. In the case of Sundaram Mutual funds the SIP dates are 1, 7, 14, 20, & 25. Investor can opt only any one of the dates for investment. In this case, every month during the SIP tenure, the investor will be allotted units based on the NAV on that particular date. In case it is a holiday, units will be allotted on the next working day.

SIP monthly installments for the tenure and the first cheque need not necessarily be for the same amount.

SIP monthly installments for the tenure should be given for the same amount.

Switch from one fund to another can be done by giving a switch request and clearly indicating the SIP instructions. If it is clear, the switch will be activated and the investment will be made according to the instructions, else, the SIP will continue in the old scheme. In case of SIP through Post Dated Cheques (PDCs), a new application and fresh cheques in favour of the new scheme have to be submitted. The old PDCs would be returned to the investor.

Units allotted will be equal to (Amount invested / Applicable NAV). The Applicable NAV is the NAV on the day, when the investment will be made. Thus, the units allotted will differ depending on the applicable NAV during different months.

If the SIP date during a particular month is a holiday, units will be allotted at the applicable NAV on the subsequent working day

If in the application form the investor has opted for Dividend Reinvestment, the dividend amount will be directly invested in the fund and units will get accumulated to the investor. If the investor opts for Dividend Payout, the dividend amount will either be credited in the account of the investor or will be sent as cheques depending on the option chosen.

While applying for purchase of units, the POA holder needs to submit the original POA (Power of Attorney ) or a duly notarized copy. The Power of attorney should contain the signature of both the first holder and the POA holder. Only when the POA is registered does the POA holder have the right to transact on behalf of the NRI/FII investor. His signature will be verified for processing any transaction/request.

Pursuant to RBI guidelines on Electronic Clearing Service (ECS), the process stated below shall be followed for ECS (and post-dated cheque) rejections pertaining to investments in the schemes through Systematic Investment Plan (SIP):

a. If the rejection of ECS is for the reason "account closed", no re-presentation shall be made and this will lead to closure of SIP.

b. If the rejection of ECS is for the reason "insufficient funds", only one subsequent representation shall be made. Rejection of the subsequent representation will lead to closure of SIP.

c. If the rejection of ECS is for any other reason, only two subsequent re-presentations shall be made. Rejection of the two subsequent re-presentations will lead to closure of SIP.

We will send the Not In Good Order policy letter along with Banker's memo through courier / Registered post. A duplicate cheque will not be accepted against the bounced cheque.

We will send a transaction confirmation through email/SMS provided you have registered your email address and mobile number with us.

Yes. You would require a PIN or Personal identification Number to be able to transact online.You may call our toll free 1800 103 7237 for further information.

If the investor wishes to change the amount / date/frequency of an ongoing SIP, the investor needs to use a fresh SIP application form to register a new SIP in the same Scheme.

Investor will have the right to discontinue the SIP facility at any time by sending a written request to offices of Sundaram Asset Management or Customer Care Centres of Registrar & Transfer Agent. This request notice should be received at least 21 days prior to the due date of the next payment.

No. Purchases made through third party cheque(s) and third party ECS will not be accepted. In case of payment from a Joint Bank Account, the First holder in the Application must be one of the Joint Account Holders of the Joint Bank Account. However the following are excluded from this restriction:

  • Gifts to a minor from Parents/Grand Parents up to Rs50,000(for each Purchase /per SIP Installment).
  • Employer’s Remittance of Payroll deduction on behalf of Employees.
  • ,li> Custodian’s payment on behalf of an FII /Client.

Sundaram Mutual has not yet launched SIP with Insurance.

We need written request for change of Broker Code to DIRECT. As per investor request, we will change the Broker code as DIRECT. Only after the request letter is received by the AMC future transactions would be processed without Entry Load.

At present we allow only weekly, monthly and quarterly intervals

Yes, you will get an "SIP due" alert five days before the next SIP date, provided you have registered your email address and mobile number with us . The investor would also be getting an email/SMS alert for SIP renewal, on a T minus 7 day basis, where T is the last SIP transaction date.

Renewal option is available. Any extension of an existing SIP will be treated as a new SIP based on the date of receipt of such a renewal application. Terms and conditions applicable will be as on the date of renewal.

SIP is always favorable than lump sum investment as different units are allotted at different market levels. The investor is not required to accumulate a huge sum at one go, but can invest periodically a small amount and accumulate in a phased manner. When the market is very volatile different units are allotted at different phases.

On Behalf of the Minor, the investment is made through the Guardian. Based on receipt of attested copy of birth certificate of the minor, his PAN card copy, the KYC ( Know Your Client) confirmation / acknowledgement letter the banker's (of the bank registered in our records/going to be registered in our records) attestation of his signature and bank details, along with a covering letter duly signed by both minor and guardian for change in status, the status could be changed from On Behalf of Minor to Individual.

The SIP Enrolment and Auto Debit form can also be used to change bank details to an ongoing SIP. Please tick the box indicated, fill in the folio number alongside, proceed to fill up the details under SIP Auto Debit: Bank Account Details, and sign.

In case of Systematic Investment Plan (SIP) / Systematic Transfer Plan (STP) registered under the Regular Plan prior to 01/01/2013 without broker code, the installments falling on or after 01/01/2013 will automatically be processed under the Direct Plan.

In case of SIP/STP registered under the Regular Plan prior to 01/01/2013 with broker code, the installments falling on or after 01/01/2013 will continue to be processed under the Regular Plan.

Investors, who had registered for SIP/STP prior to 01/01/2013 with distributor code and wish to continue the same under the Direct Plan after 01/01/2013, shall make a written request to the Fund in this behalf. The Fund will take at least 21 working days to process such request Intervening installments will continue in the Regular Plan.

By using the SIP Top-Up feature, you can increase your contribution in an SIP at pre-determined intervals by a fixed amount during the tenure of SIP.

  • Add to your Savings: As personal income increases, you can add to your investments through SIP by opting to top-up your investments by a fixed amount at pre-determined intervals.
  • Ease of business: This unique service offering also helps avoid the paper work associated with increasing your SIP contribution during the SIP tenure.
  • Ease of Maintenance: The Top-Up feature reducing the necessity for creating and tracking multiple SIPs in the same Scheme.

Please find an illustration of how the Top-Up feature operates.

SIP details
SIP Period: Jan-2014 to Dec-2016 (3 Years) Monthly SIP Installment
Amount: Rs 1,000
SIP Date: 1st of every month (36 installments)
Top-up details
Top-up Amount: Rs 1,000 Top-up
Frequency: Yearly
Year SIP without Top-up feature SIP with Top-up feature
Monthly SIP Installment Amount (a) SIP Amount for the year (b) Monthly SIP Installment Amount (c) Top-up Amount (d) SIP Installment including the Top-up Amount (e) SIP Amount for the year (f)
    (a) x 12 months     (c) + (d) (e) x 12 months
2014 1,000 12,000 1,000 N.A. 1,000 12,000
2015 1,000 12,000 1,000 1,000 2,000 24,000
2016 1,000 12,000 2,000 1,000 3,000 36,000
Total   36,000       72,000

Top-up feature under the SIP facility is currently available under all open-ended schemes of Sundaram Mutual except Sundaram Money Fund and Sundaram Monthly Income Plan-Aggressive and Conservative Plans.

Minimum amount of Top Up is Rs.500 and in multiples of Rs. 500 thereafter.

Yes. SIP Top-Up is available for Monthly and Quarterly SIPs.

  • For the Monthly SIP, the SIP Top-Up feature is available at half-yearly and yearly frequencies
  • For the Quarterly SIP, the SIP Top-Up feature is available at yearly frequencies.
  • Default Frequency: Yearly. In case the investor does not specify the frequency for Top Up the applications shall be processed with the Yearly frequency.
  • Default Amount : Rs. 500/- .In case the investor does not specify the amount for Top-up, the applications shall be processed with the amount of Rs.500/-.
  • In case the investor does not specify the frequency for Top-up and amount for Top-up, the application form may be processed as SIP without Top-up feature, subject to it being valid and complete in all other aspects.

SIP installment amount has to be a minimum of Rs. 500/- in order to avail the top-up facility under monthly SIP. Otherwise, the transaction would be processed as a SIP without Top-up feature subject to it being valid and complete in all other aspects.

No. The Top-up option must be specified by the investors while enrolling for the SIP facility.

No. Top up feature is presently not available for weekly SIPs. Will keep the investor informed, once we enable the facility for weekly SIPs.

No. The Top-up feature shall be available for SIP Investments only through ECS (Debit Clearing) / Direct Debit Facility/Standing Instruction.

The Top-up details cannot be modified once enrolled. In order to make any changes, the investor must cancel the existing SIP and enroll for a fresh SIP with the revision in Top-up details.

Half yearly Frequency : To avail of half-yearly the SIP period has to be for a minimum of seven complete months.

Yearly Frequency : To avail of yearly frequency the SIP period has to be for a minimum of thirteen complete months.

  • Half yearly top up option: Under this option, the amount of investment through SIP installment shall be increased by an amount chosen by the Investor post every 6th (sixth) SIP installment.
  • Yearly Top-Up option : Under yearly top up option, the amount of investment through SIP installment shall be increased by an amount chosen by the Investor post every 12th (twelfth) SIP installment.

Under this option, the amount of investment through SIP installment shall be increased by an amount chosen by the Investor post every 4th (fourth) SIP installment.

In case the investor who has registered under quarterly SIP has opted for half yearly Top-up, the SIP will be registered and processed as Yearly Top-up.

No. The top-up feature shall not be available in the following cases:

  • SIP registration under perpetual mode.
  • SIP registrations which are received through Channel Partners, Exchanges and ISIPs.
  • Registrations under COMBO SIP facility.

This feature is optional only.

The information included in the "Frequently Asked Questions" section, is for informational purposes only. Investors are requested to read the offer document in conjunction with addendum before investing.

Mutual fund investments are subject to market risks, read all scheme related documents carefully.