How to Start SIP in Groww

Introduction

Looking for an option to invest regularly with zero worries about market timing? Here’s the answer. A Systematic Investment Plan, popularly known as SIP is one of the easiest and most effective ways to build wealth over time. In this blog post, we’ll walk you through how to start SIP in Groww, from setup to investing, and much more. Once you read the entire article, you’ll know exactly what to do to get started confidently.

What is SIP and Why Choose It

A SIP (Systematic Investment Plan) lets you invest a fixed amount periodically, generally monthly, rather than making a lump-sum investment. This approach helps you average out the cost of investment, benefit from compounding, and reduce the stress of market timing.

The benefits of SIPs are many:

• You can start with a small amount (even as low as ₹100).
  
• It enforces investment discipline – you invest regularly without considering market fluctuations.
  
• SIP investments can generate significant returns in the long run due to the power of compounding. Thus when it comes to long-term goals like retirement, child education, or asset building, SIP is the best choice to think of.
  

Given these benefits, using a reliable platform like Groww to start an SIP makes the process simple and user-friendly.

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Prerequisites Before Starting SIP on Groww

Before you click “Start SIP,” make sure you have done the following steps:

• KYC verification: Your identity and address must be verified according to regulatory norms. Groww (like other platforms) requires proper documentation to comply with KYC.
  
• Bank account linked: Ensure that your bank account is linked correctly. This will be the account from which your monthly SIP instalments will be auto-debited.
  
• Clarity about your financial goals: Be clear about what you are investing for; whether it is retirement, major expenses, or wealth building. Based on your goals, you can choose the funds and decide about the investment amount.
  
• Understand risk appetite & investment horizon: Have clarity on how much risk you can tolerate and for how long you’re willing to stay invested. SIPs are best suited for medium to long-term horizons.
  

With these ready, you’re all set to begin.

Step-by-Step Guide: How to Start SIP in Groww

Here’s a clear walk-through of how to start SIP in Groww, step by step:

• Open the Groww app or website

Log in or sign up if you are yet to create an account. Make sure you complete the KYC process and link your bank account.

• Go to the ‘Mutual Funds’ section

On the home screen, navigate to the Mutual Funds section and click on “Explore.”

• Search and pick a mutual fund

Use the search bar to find a mutual fund scheme that aligns with your goals and risk profile. Click to view fund details before proceeding.

• Click on ‘Monthly SIP’ or ‘Start SIP’

On the fund’s page, select the option for regular investment (SIP), rather than a one-time lump sum.

• Enter your SIP amount and choose date

Enter the amount you wish to invest each month. Choose a convenient date for auto-debit. Groww allows you to set the date as per your preference.

• Make the payment for the first installment

Pay your first SIP installment via UPI or net banking. This confirms the SIP setup.

• Set up auto-debit/auto-mandate for future instalments

To ensure future instalments are deducted automatically, enable the auto-pay mandate (bank mandate or other method as offered).

• Confirmation and processing

After payment and mandate setup, your SIP order will be processed. Usually, it takes a few days (or next cycle) for the first investment to reflect in your dashboard.

Once these steps are completed, your SIP is active, and you are now regularly investing without manual intervention every month.

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Tips for Choosing the Right Mutual Fund in Groww

Picking the right fund is equally important as setting up the SIP. Here are some guidelines:

• Match fund risk profile with your goals: If you have a long-term horizon and are ready to deal with volatility, you might go for equity funds. On the other hand, if you have short/medium-term or lower risk tolerance, debt or hybrid funds would be a better option.
  
• Diversify across asset classes: Instead of putting all your money into one equity fund, diversify across equity, debt, and hybrid funds so that it balances potential returns and risks.
  
• Check fund expenses and past performance: Look at expense ratio, historical returns, fund performance over 3–5 years (though past performance isn’t guaranteed, it gives perspective).
  
• Consider fund objectives: If you have a specific goal like tax saving, child education or retirement, pick fund types accordingly (e.g. growth, balanced, conservative).
  
• Re-evaluate periodically but stay away from frequent changes: SIP is meant for long-term investing. Don’t make impulsive changes based on short-term market moves.

How to Manage and Track Your SIP After Starting

Once you start your SIP, it’s important to monitor and manage it wisely:

• Use Groww Dashboard: The app shows the total invested amount, current value, profit/loss, and performance history. This helps you track how your SIP is doing over time.
  
• Do not react to short-term market fluctuations: Since SIP benefits from long-term compounding, don’t get influenced by monthly or quarterly dips. Stick to your plan, unless there is a change in your financial goals or risk appetite.
  
• Review periodically (e.g. annually): Reassess your allocation, and adjust SIP amounts or add new funds if required. With the evolving Inflation, income changes or goals, SIPs should also be adjusted accordingly.
  
• Consider Top-up or Step-up SIPs: With a rise in your income over time, you can increase your monthly SIP amount as well. This helps improve returns and keep pace with inflation (if you choose funds that lets you make changes to the SIP amount).

Common Mistakes to Avoid When Starting SIP

Even though SIPs are straightforward, many beginners make mistakes. Here are some key areas to watch out for:

• Starting without KYC or verified bank account – SIP won’t activate properly or gets delayed.
  
• Choosing arbitrary dates or amounts without planning – Don’t pick a high monthly amount you can’t sustain. That defeats the purpose of disciplined, regular investing.
  
• Putting all money in high-risk funds regardless of risk appetite – This may lead to distress during market downturns.
  
• Switching funds too frequently – Frequent changes reduce the benefit of compounding and may lead to missed opportunity.
  
• Not doing auto-pay/mandate setup – If you forget to enable auto-debit, you may miss installments and lose investment discipline.

Parting Words

For those who are new to mutual funds, it is quite important to seek guidance from an expert mentor. Entri Finacademy, a trusted finance education platform in the field of stock market courses since 2017, is also offering mutual fund courses. A SEBI-compliant platform with over 9 million students, Entri can provide the answers for all your unanswered queries on mutual funds. Right from how to choose a mutual fund that best fits your needs to how to redeem a mutual fund, Entri Finacademy’s trainers are there to help you out. To know more about Entri Finacademy’s courses, click here.

Key Takeaways

• SIPs are ideal for disciplined, long-term investing as even small amounts add up over time.
  
• With Groww, starting a SIP is simple: pick a fund, enter amount & date, pay once, set up auto-debit.
  
• Pick funds based on your financial goals, risk appetite and investment horizon and also diversify.
  
• Monitor regularly but do not react to short-term market volatility, SIPs work best with patience.
  
• Customize and adjust SIP as your income or life goals evolve – top-ups, more funds, or longer duration.