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Why is the minimum initial investment for SIPs in some schemes higher on Coin?

There are two types of purchase orders when you invest in a mutual fund:

  1. Lump sum orders - A type of order where you make an investment in one go.
  2. SIP orders - A type of order where you invest a certain predetermined amount at a regular interval.

Whenever you place an SIP order at Zerodha Coin, we do not follow the conventional SIP model. All your orders are sent to the AMCs (fund houses) as lump sum investment orders on your chosen SIP dates. Lump-sum investments consist of 'Minimum Initial Investment Amount' and 'Minimum Additional purchase Amount'.

The Minimum Initial Investment Amount is the minimum amount you need to invest in a fund for the very first time you invest.

The Minimum Additional purchase Amount is the minimum amount that you need to invest in all the subsequent investments for the selected fund.

Here is an example :

  1. Assume you intend to start an SIP with SBI Bluechip fund.
  2. SBI Bluechip fund has the minimum initial investment amount as Rs.5,000/- and the minimum additional purchase amount as Rs.1,000/-
  3. So your first investment has to be Rs.5,000/- or more.
  4. The subsequent SIP amounts can be Rs.1,000/- or more.
  5. Please note, both these amounts are set by the AMC.

Since the AMC specifics Minimum Initial Investment Amount for the first time you invest, the  SIP amount can be higher on coin compared to the AMC site.

Why is my SIP processed as a lump sum? Are there any advantages to it?

Treating your SIP as a lump sum allows you more control over your SIPs. You can select the SIP dates and frequency as per your convenience & you can easily pause, modify, step up or restart your SIP online without any hassle or document submission.

I want to invest in the normal SIP without the initial investment order. What do I do?

To help out clients who want to invest in SIP orders which are not created internally by the Zerodha system, we have the provision of AMC SIPs. These are purchase orders wherein you set up the SIP with an AMC directly, using the Coin interface.

In any case, the minimum initial investment amount varies between different AMCs and schemes. So, some schemes might start at Rs 5000, Rs 1000, or Rs 500.