You will see higher minimum initial investment amounts on Coin because Zerodha processes your SIP orders as lump sum investments rather than traditional SIPs. This approach follows the fund houses' lump sum investment requirements.
How Coin processes your SIP orders
When you invest in mutual funds, you can choose between two types of orders:
- Lump sum orders: You make an investment in one go
- SIP orders: You invest a predetermined amount at regular intervals
Zerodha processes all your SIP orders on Coin as lump sum investments to the AMCs (fund houses) on your chosen SIP dates. This means your investments must meet the AMC's lump sum investment criteria, which include:
- Minimum initial investment amount: The minimum amount you must invest when investing in a fund for the first time
- Minimum additional purchase amount: The minimum amount you must invest in all subsequent investments
Example of minimum investment requirements
If you want to start an SIP with SBI Bluechip fund:
- SBI Bluechip fund requires a minimum initial investment of ₹5,000 and minimum additional purchases of ₹1,000
- Your first investment must be ₹5,000 or more
- Your subsequent SIP amounts can be ₹1,000 or more
- The AMC sets both these amounts
Since AMCs specify the Minimum Initial Investment Amount for first-time investments, your SIP amount on Coin may be higher compared to the AMC's website.
Why does Coin process SIPs as lump sum investments?
Processing your SIP as lump sum investments gives you more control over your investments. You can:
- Select SIP dates and frequency according to your convenience
- Pause, modify, step up, or restart your SIP online without any hassle
- Avoid document submission for SIP modifications
Alternative: AMC SIPs for traditional SIP processing
If you prefer traditional SIP processing without initial investment requirements, you can use AMC SIPs on Coin. With AMC SIPs:
- You set up the SIP directly with the AMC using Coin's interface
- You follow the AMC's traditional SIP model
- Minimum investment amounts will vary between different AMCs and schemes
Some schemes may start at ₹5,000, ₹1,000, or ₹500, depending on the specific AMC and fund requirements.