Sachetisation of Mutual Fund Investments with small ticket SIP of Rs. 250/-
Any investor can invest in a mutual fund scheme by way of a lumpsum investment (i.e. single payment) or by way of Systematic Investment Plan (SIP) [i.e. periodic payment over a defined time period].
The landscape of mutual fund investing in India is continually evolving. In order to increase the reach of the Mutual Funds across the country, to facilitate participation from low income group sections of the society and to achieve the larger objective of financial inclusion, a proposal of sachetisation of mutual funds has been envisaged by SEBI. Sachetisation of mutual funds will enable small ticket investment in mutual funds gradually on a periodic basis. This can assist in financial empowerment of the underserved section of the economy.
To serve the objective outlined above, SEBI in collaboration with the Mutual Fund industry has envisaged a sachetized mutual fund product i.e. small ticket SIP of Rs. 250/-. All intermediaries which are regulated by SEBI and which provide service and infrastructure support to Mutual funds have generously agreed to participate in this initiative to make the product viable and sustainable.
Presently, while some Asset Management Companies (“AMC’) do offer SIP with small ticket size under some of their schemes, the product proposed to be offered under the sachetized mutual fund product i.e. small ticket SIP of Rs. 250, provides an opportunity to the entire industry to participate in this cause of financial inclusion.
Features of the Proposed Small Ticket SIP:
1) The small ticket SIP i.e. Rs. 250/- SIP that an investor can start may be restricted to three SIPs (one each in upto 3 Asset Management Companies).
2) Small ticket SIPs may be offered under the Growth option of the plan.
3) Considering the higher cost of investment through alternate modes, the mode of payment/investment for small ticket SIP may be restricted to National Automated Clearing House (NACH) and Unified Payment Interface (UPI) auto pay mode only.
4) The small ticket SIP may be made in Statement of Account (SOA) mode or demat mode of investment.
5) Small ticket SIP is primarily envisaged for monthly SIPs. The option of fortnightly small ticket SIPs may also be enabled by AMCs.
6) Commitment by an investor under the small ticket SIP scheme should be for 5 years i.e. 60 investments. However, if investors desire to stop SIP or withdraw the SIP investment prematurely, there should be no restriction on it.
7) Small ticket SIPs shall be offered in any schemes except for Debt schemes, Sectoral & Thematic Schemes, Small-cap and Mid-cap Schemes under Equity Schemes category.
At Zerodha Fund House, we are committed to making investing simpler and more accessible for everyone with an aim to pursue financial inclusion. In line with this mission, we launched our first index fund - Zerodha Nifty LargeMidcap 250 Index Fund with a minimum investment starting at just INR 100. This aligns perfectly with the ongoing efforts to lower entry points for investors, allowing even more people to benefit from long-term investing habits. You can explore this scheme here.
Conclusion:
The 250 rupee SIP may further ease entry for investors and help them participate in the capital markets, potentially contributing to their financial well-being.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully
Please note that this article or document has been prepared on the basis of internal data/ publicly available information and other sources believed to be reliable. The information contained in this article or document is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party in any manner. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article or document.
Published on Jan 27, 2025
