SIP is increasingly becoming the preferred mode of investing in Mutual Funds. As additional information is required in the case of registration of SIP, there is increased scope for investors to miss out on out important information leading to incorrect registration or even rejection of the application.
We give some hints on filling SIP forms correctly for successful registration. Please note that Mutual Funds require the same information, even though the format of the form may differ.
Common Application Form (CAF) – SIP information:
Every investor entering the Fund / scheme for the first time should first fill in the Common Application Form (CAF).
Mandatory information should be filled correctly – name and address, bank details, PAN. Attach the PAN copy and KYC acknowledgement form for all holders.
While entering the scheme details in the CAF, some Mutual Funds have a column to indicate if the application is a lump sum investment or an SIP. Investors should clearly enter the scheme / cheque details on the CAF.
SIP Enrolment /Auto-debit / ECS Mandate Form:
Earlier, when SIP was a new product, investors would have to attach as many cheques as the number of installments and write down details on each cheque. Now, the amounts can be directly debited to the investor’s bank account by filling this form correctly.
Investors should indicate if the SIP is a new registration or a renewal and fill the name and other particulars. Existing Unit Holders in the Fund need to fill only the SIP Enrolment form and quote the Folio number. In addition to investor details, there are other important fields to be filled.
Scheme Details: The Scheme, Plan (Growth or Dividend) and Dividend Option (payout or reinvestment) should be clearly indicated.
Each SIP Amount or Amount per installment: This refers to the amount investors wish to invest periodically. This should be the same amount as the First SIP cheque and please refer the Scheme Documents to note the minimum amount.
Frequency: This refers to the periodicity of the SIP i.e. monthly, quarterly or as allowed by the Fund.
SIP Debit Dates: This refers to date on which the amount would be debited periodically and units allotted. The choice of the date could for example be the 1st or 15th or 25th of the month.
First SIP cheque: This should be drawn on the same bank account which is registered for SIP debit. The first SIP cheque and subsequent SIP installments should be of the same amount
SIP Enrolment Period: There is a start and end date in each SIP form. This indicates the date on which the investor wishes to start the SIP installments and the date on which the SIP should end. E.g. Start date – 7.1.2011 and end date – 7.12.2011.
Both days are included and usually there should be a minimum time gap of 30 days and maximum gap of 60 days from the date of the first cheque for SIP investment and the first installment through ECS Debit. Mutual Funds have a minimum number of installments and this should be noted.
Particulars of Bank Account: This refers to the bank account from which the SIP amounts would be deducted. It is very important to give bank details, branch, ECS (MICR) number, account type accurately and enter the Account holder’s name as it appears in the bank account.
Signature in the Authorization Form: Finally, the investor, being the Bank Account holder, should sign the authorization in the form as is available in the bank records for successful registration of the mandate with the bank.
Contributed by Investor Education Team of CAMS. The views expressed herein are general practices in the Mutual Fund industry and may vary on a case to case basis.