Kotak AMC Launches Rs 250 SIP Facility For First-Time Investors - Check Details

Kotak Mutual Fund announced the launch of a new facility called “Choti SIP”. The fund house said that the facility will be available for investors in all eligible schemes offered by the company.

With the launch of the new facility the fund house plans to enable first-time investors to invest via Systematic Investment Plans with a minimum investment of Rs. 250. The fund house said in a release that the launch of the new facility has been made to make investing in mutual funds accessible for a wider set of investors.

The fund house plans to make SIP investment more accessible for new investors, by reducing the minimum amount required for investing in SIPs. Only first-time investors in mutual funds will be eligible to use the ‘Choti SIP’ facility. Additionally, investment will only be allowed in the ‘Growth Option’. Such new investors will also be required to commit to a minimum of 60 instalments on a monthly basis.

The fund house added that investors who wish to use the facility must make payment through National Automated Clearing House (NACH) or UPI auto-pay only.

Nilesh Shah, Managing Director of Kotak AMC claimed that a vast majority of people in India are not mutual fund investors which in turn is a ‘massive, untapped opportunity’ for the domestic mutual fund industry. He also emphasised that SIPs have been instrumental in helping new investors in kick-starting their investment journey.

“Only about 5.4 crore unique investors of India’s population are mutual fund investors—leaving a massive, untapped opportunity for penetration and bringing the Indian saver closer to financial freedom. Systematic Investment Plans (SIPs) have been an excellent way to bring new investors and kick-start their mutual fund journey. With the launch of Choti SIP, a new investor can begin their wealth creation journey with a minimum amount of Rs. 250. We can call it ‘Choti Rakam – Bada Kadam’,” Shah said.

With the launch of the facility, the fund house has also joined the ‘sachetisation’ bandwagon. Earlier in January, the Securities Exchange Board of India and the Association of Mutual Funds In India proposed the introduction of small-ticket investments, starting at Rs 250.

The sachetisation of mutual fund investments can potentially provide an alternative to other unregulated investments such as chit-funds. This in turn can increase the number of formal investors who can invest in mutual funds despite low incomes. However, investors must do their own research or consult financial experts and tax advisors before making an investment decision.