How to enroll in SIP in Nepal

Steps to enroll in SIP in Nepal

Step 1: Open a Demat Account

To open a Demat account, visit any capital or brokerage firm recognized by SEBON, such as NIC ASIA Capital. You will need to fill out an application and provide a citizenship certificate or passport, and a few passport-sized photographs.

After completing these formalities, you will receive a BOID number, which uniquely identifies your Demat account.

Step 2: Choose a Mutual Fund

Mutual funds in Nepal are regulated by the Securities Board of Nepal (SEBON) to protect investors and maintain market integrity. When selecting a mutual fund manager, ensure it is legally authorized and regulated by SEBON. Once you’ve identified funds with a valid SEBON license, compare them based on factors such as performance history, fund objectives, expense ratios, and risk levels.

Nepalese mutual funds may specialize in equities, bonds, or a combination of both, allowing you to invest in the sectors you prefer. It’s also important to understand each fund’s objective—whether you’re saving for a child’s education, planning for retirement, or focused on general wealth creation. By clarifying your financial goals and assessing the fund’s investment style, you can select a mutual fund that aligns with your investment preferences and risk tolerance.

Step 3: Set up SIP

A Systematic Investment Plan (SIP) involves deciding on a fixed investment amount and the frequency—monthly ,quarterly, semi-annually or yearly. In Nepal, many SIPs allow you to begin with as little as NPR 1,000, although minimum requirements may vary by fund.

When setting up your SIP, define its duration according to your financial goals and anticipated withdrawal plans. For instance, equity-oriented funds are generally better for long-term growth, while balanced funds may suit moderate risk takers. You can subscribe to a SIP through the mutual fund’s website, a direct application form, or another approved channel. Provide your Demat account details, a valid government issued ID and set up a debit mandate from your bank to facilitate automatic, continuous investing.

Step 4: Monitor Your SIP Investments 

To keep your SIP on track, periodically review your portfolio’s performance. You can track returns through Mero Share or the online portal provided by your Demat service provider. For example, NIC ASIA Capital offers an easy-to-use online system where you can log in to check your portfolio’s performance, returns, and other details.

Monitoring your investments helps you spot opportunities to adjust your monthly SIP contributions—either increasing them to accelerate wealth creation or reducing them during periods of financial strain. If you need personalized advice, consider consulting a financial advisor or engaging directly with the mutual fund manager. This tailored support can help you optimize your SIP strategy and stay aligned with your long-term goals.

Tips for First-Time SIP Investors in Nepal

1. Diversifying investments

Diversification is vital for managing risk. Rather than placing all your money into one mutual fund, consider allocating it across different fund types, such as equity, debt, and balanced funds. Each fund has its own risk-return profile, and spreading your investments among them helps cushion your portfolio against market volatility. When one type of fund underperforms, others may perform better, leading to more consistent returns over time.

2. Choosing the right fund based on risk appetite

Selecting a mutual fund that aligns with your risk tolerance is crucial.

• Equity Funds: Suitable for investors comfortable with higher risk in exchange for potentially higher long-term returns. These funds invest in stocks and can experience greater volatility.
• Debt Funds: Ideal for those seeking stability and lower volatility. These invest in government or corporate debt instruments, providing steady but typically lower returns.
• Balanced Funds: Offer a mix of both equity and debt, aiming for moderate growth with less risk than pure equity funds.

By choosing a fund that matches your comfort level and investment goals, you can maintain a balanced portfolio over the long term.

3. Importance of starting early for long-term benefits

Beginning your investment journey as soon as possible allows your money more time to compound. Compounding occurs when the returns you earn are reinvested, generating additional returns over time. By starting early, you can build a larger fund to finance future goals, such as children’s education, retirement, or purchasing a home. Early investing also makes it easier to achieve long-term objectives without significant financial strain, since your contributions and compounding gains work together to create substantial wealth over time.

Also check out:

1. Benefits of SIP in nepal
2. What is SIP risk

FAQs

Should I start SIP when the market is high?

Yes, SIPs allow you to invest regularly, enabling you to benefit from market fluctuations through rupee cost averaging. By investing a fixed amount at regular intervals, you purchase more units when prices are low and fewer units when prices are high, reducing the overall impact of market volatility.

Is SIP better than FD?

SIPs typically offer higher returns over the long term compared to Fixed Deposits (FDs). However, SIPs involve market-related risks, while FDs provide guaranteed returns. Your choice should depend on your risk tolerance and financial goals.

How to invest in SIP without broker?

You can invest in SIP directly through a mutual fund's official website or mobile app.

What happens if we cancel an SIP?

If you cancel an SIP, your future contributions will stop, but the investments you have already made will remain in the mutual fund. These investments will continue to generate returns based on the fund’s performance.