What Exactly Is the SIP Registration Process in Nepal?

SIP registration for investment in mutual funds in Nepal is an easy process. If you are willing to know about SIP registration in detail, this article is exactly all about it. 

Systematic Investment Plan (SIP) is one of the investment plans. 

SIP has become popular in Nepal in recent years.

SIP is invested for the future return.

Compounding of returns is the power of SIP investment through mutual funds.

Understanding SIP in Brief

In short, SIP stands for Systematic Investment Plan. It's an investment strategy primarily used in mutual fund investments.

From the word ‘systematic’, you can understand the core point of SIP which is not occasional investment but regular investment.

Major Features of Systematic Investment Plan (SIP)

Regular Investments:

SIP allows individuals to invest a fixed amount regularly. It may be weekly, monthly, quarterly, or yearly in a mutual fund scheme.

The mutual fund scheme is managed by capital companies such as Nabil Invest, NIC Asia Capital and so on in Nepal.

Disciplined Approach:

It promotes a disciplined approach to investing by setting aside a specific sum at regular intervals.

Rupee Cost Averaging:

Through SIP, investors buy more units when prices are low and fewer units when prices are high. This strategy is known as rupee cost averaging, potentially reducing the average cost per unit over time.

Flexibility:

Investors can start a SIP with a minimal amount and increase it gradually over time as per their financial capability.

Long-Term Wealth Creation:

SIPs are generally considered beneficial for long-term wealth creation, helping investors achieve their financial goals.

SIPs are prevalent because they offer an accessible and manageable way for individuals to enter the world of investments without needing a large sum of money upfront. 

They provide a disciplined approach, take advantage of market fluctuations, and are suited for various financial goals, such as wealth creation, retirement planning, or funding-specific objectives.

Getting Started with SIP Registration

Choosing a Mutual Fund Company

First of all, you need to choose mutual fund company if you want to invest in SIP.

In a simple language, you have to choose which capitals you choose for SIP registration in Nepal.

After choosing the mutual fund company, you need to fill up the form which is also known as KYC.

Necessary Documents for SIP Registration

Some documents are very necessary to submit for the SIP registration.

A citizenship certificate is one of the mandatory documents for SIP registration.

Other than that, you need to submit the document of your DEMAT account confirmation along with your income source which are not mandatory.

Step-by-Step SIP Registration Process

The SIP registration process is very simple. These simple steps of SIP registration process, in general, is listed below.

• Filling form online with the KYC Form
• Submission of Required Documents
• Selecting a Suitable SIP Plan
• Completing the SIP Registration Form
• Submitting Forms and Initial Investment

SIP registration process in Nepal starts with choosing a Mutual Fund Company.

In which mutual fund company you want to invest in, decide it. Several companies in Nepal offer mutual fund schemes.

Once you choose a mutual fund company in which you want to invest, you need to visit their website and select the SIP Investment Section. 

There you will see SIP registration menu. Click on that menu.

You will see the SIP registration forms which includes different sections of information related to Applicant Detail, Application Detail, Bank Details and KYC Verification.

Now, you fill up the necessary information related to you in the Applicant detail section of the form. 

In the Application Detail section, you need to fill the information related to ‘Selecting a Suitable SIP Plan’ which includes SIP amount, SIP Period, SIP payment mode, SIP model etc. 

Then you should also fill the information related to your bank account.

When you complete the information fill up, you need to upload scan copy of the documents in the KYC Verification section. 

After that you need to provide your email address to get the OTP code before completing SIP registration. 

When you get the OPT code in your email, you need to put it in the OTP box and submit the form.

The mutual fund company will check your SIP registration request and verify the documents. 

If all the provided information and submitted documents are found genuine, your request of SIP registration will be complete.

Important Considerations

Understanding SIP Terms and Conditions: It is one of the important things to understand the SIP terms and conditions. 

You are requested to read all the terms and conditions in detail. If you could not be clear again, you can visit the mutual fund company and ask to any responsible personnel.

Fees and Charges Associated with SIPs: There might have various types of fees and charges provisions for SIP. 

You need to know about it as well before to start SIP Registration.

Updates on Regulations and Requirements: There might be updates on the regulations of the government related to SIP and financial investments. 

You need to be updated on the regulations time and again.  

Possible Risks on SIP Registration

When considering SIP registration in Nepal, it is important to be aware of the potential risks associated with this investment strategy. 

Major risks include market fluctuations and volatility. 

Since SIPs involve regular investments over time, the value of the investments may fluctuate with market movements. 

Economic conditions, political changes, or global events can affect the performance of mutual funds, potentially affecting investment returns.

Additionally, when SIPs are intended for a long term, short-term fluctuations can lead to temporary losses or expected returns. 

Moreover, there is no guarantee of fixed returns as they are subject to market risks. 

Investors should also consider the possibility of poor performance of the chosen mutual fund scheme due to factors such as poor fund management or changes in market dynamics. 

However, it is important to note that while these risks exist, SIP is generally considered a relatively safe way to invest in mutual funds over the long term, allowing investors to mitigate potential risks through disciplined and regular investments.

In summary, the SIP registration process in Nepal is very easy but you need to understand many more considerations before going to SIP registration.