Alert SIP

Description

Alert SIP is similar to Regular SIP except that it does not involve an ECS mandate. Hence, in this method, no automatic debits are made in the investor's account. This method requires the investor to login every month to complete the SIP transaction in their account.

Advantage

There are two advantages to the Alert SIP method of investing. Suppose an investor has a bank account which does not support timely ECS debits. In this case, setting up a regular SIP would not be possible, but Alert SIP can be setup since it does not require ECS mandates. Also, if the investor wants complete control over the debits and investments, Alert SIP is a good way to go. In this method, the investor can change the amount of their investment monthly to suit their convenience.

When to use

As we saw above, this method of SIP is ideal for investors who don't want to go through automatic ECS debits and want to control their monthly investments.

How to setup

Setting up an Alert SIP is very similar to setting up a regular SIP. The process is as follows:

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 an Alert SIP' on the Alert 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). Since no ECS mandates are involved, you do not need to specify the bank account to be used for these 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. In the case of Alert SIP, you will need to make an initial investment to create the folio for your investments. So, in the next screen, you will be taken to your netbanking system to do so.
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.
9. That's it, the Alert SIP setup in FundsIndia is complete!

Note: The minimum amount of investment for Alert SIP is different from that of a Regular SIP. Alert SIP has a minimum of Rs. 2000 per SIP transaction. Regular SIPs typically have Rs. 1000 as a minimum (varies from scheme to scheme)

Monthly Process

For Alert SIP, there is a monthly action required by the investor to complete the investment transaction. Let us see how this works with an example.

Suppose an investor has chosen to invest Rs. 2,500 each in two schemes, totalling Rs. 5000 per month on the 10 of each month.

The FundsIndia system will send notifications to the investor via email on 8th and 9th of each month of the SIP letting them know that an Alert SIP payment is upcoming. On the 10th, the system will again send an email and an SMS to let the investor know that they can login and make the investment. The investor can then login to their account. When they do so, a button called 'Pending Payments' will be actively visible in the 'My Account' page of the investor. The investor needs to click on that button to go to the payments page. In this page, the details of the investments - Rs. 2,500 for the two schemes and the total amount will be visible. The investor can then go on and login to their netbanking and complete their transaction.

The advantage is that every month, the transaction is pre-created for the investor, and all that they need to do is simply login and complete the payment. While this involves a little bit more work than a regular SIP, the control this gives to the investor in terms of making payments without ECS is significant.