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Why is the minimum initial investment for SIPs of some schemes higher on Coin compared to the AMC website or other distributor?

There are 2 modes of investments accepted by the AMC :

  • Lumpsum
  • SIP
Lump sum investments consist of 'Minimum Initial Investment Amount' and 'Minimum Additional purchase Amount'.

Let's assume you are doing a lump sum investment for the first time in a fund (for example SBI Blue Chip Fund) then you are required to invest Rs 5000 or more as this is the minimum initial investment amount. If you wish for an additional investment (lump sum again) in the same fund later on any day then you are required to invest Rs 1000 or more as this is the minimum additional purchase amount. Both these values are specified by the AMC

SIP (Systematic Investment Plan) is a disciplined form of investing your money on particular dates that are specified by the AMC. Here, the AMC requires an ECS/NACH mandate to debit the investor's bank account. Generally, the SIPs are on a monthly or quarterly basis. 

Now, taking the example of SBI Blue Chip Fund again, let's assume you want to invest in this fund for the first time through this SIP mode and not lumpsum. In this case, the AMC has specified the minimum initial investment amount via SIP is Rs 1000.

Now,

At Zerodha, we do not follow the conventional SIP model. All your orders are sent to the AMCs as lumpsum investment orders on your chosen SIP dates. This allows you more control over your SIPs. You can select the SIP dates and frequency as per your convenience & you can easily pause, modify or restart your SIP online without any hassle or document submission.

However, we have the AMC SIP option available for mutual funds schemes which have stopped accepting fresh investments via lump sum orders due to the fund size exceeding optimal AUM values.

In any case, the minimum initial investment amount varies between different AMCs and schemes. So, some schemes might ask for Rs 5000, Rs 1000 or Rs 500. If you wish to view schemes according to the minimum investment value then you can click on this link.