Automated SIP - Is It Safe?

When you start your investment journey through SIP (Systematic Investment Plan), you are supposed to make regular monthly or quarterly payments. Making manual payments may seem like a hassle every time. So comes an automated SIP.

However, a lot of times, investors have concerns about their money and automated SIPs. In this article, we will answer all your questions related to automated SIPs and how you can enable one. 

What is an Automated SIP?

An automated SIP (Systematic Investment Plan) is a way to automate your monthly SIP payments that allows your bank to deduct a specific amount of money for your SIP portfolio. Afterwards, you don’t have to perform the payment process every time you invest in the SIP.

Automated SIPs can be made via a One Time Mandate (OTM). It is a one-time mandate that instructs your bank account to deduct a specific amount every payment cycle. 

Benefits of Automated SIP

Since automated SIP is done via an OTM, here are the benefits of having a one-time mandate:

• It’s a one-time effort. All you have to do is submit an application and choose your primary bank account, and all your payments will be made automatically.
• Automated SIPs are safe and there are less chances of payment failures — which is a possibility with other payment options due to technical issues.
• It’s possible to register multiple SIPs under one mandate.
• Automating your SIPs will ensure that you stay consistent with your investments as the process will happen on its own periodically.

Are Automated SIPs Safe?

Yes, automated SIPs are a safe and convenient way to make your investments without having to make payments manually. This process is very similar to other billing processes such as gas or electricity bills. Hence, automated SIPs are a safe way to make investments.

How to Automate Your SIPs?

One way to automate your SIPs is by AutoPay. However, there are two ways that you can set up an AutoPay: autopay via OTP and autopay via the form. Here’s everything you need to know about these two methods of setting up autopay:

Automate SIP via OTP

AutoPay is more convenient and easy to use than ever before. It helps in automating payments towards all your SIPs very easily. Once the AutoPay is set up, your monthly hassle of making manual payments will be gone. Setting autopay via OTP is possible through any netbanking app. 

Automate SIP via Form

AutoPay via form is the process of setting it up via an OTM (or a One Time Mandate). It is a one-time process to set up a mandate to allow for recurring payments through a NACH form. This process is suitable for those who don’t use netbanking apps. 

Thus, OTM is a great way to make easy investments without the hassle of using netbanking services or making manual payments. You can set up an autopay via form through any online portal as well. 

Conclusion

In conclusion, automated SIPs are completely safe and very convenient to make investments. They may not seem important at first, however, they play a role in making investments seem easier in the long run.

FAQs

1. What if I skip my SIP?

If you skip your SIP due to insufficient balance, the bank will charge you a penalty for having an insufficient balance for auto-debit. 

2. Is Automated SIP secure?

Yes, automated SIPs are completely safe to use. 

3. Are SIPs good for long-term investment?

Yes, SIPs are great for long-term wealth creation. They are also convenient as you can invest in instalments instead of a lump sum amount.