Two of the popular investment options which are most prominent are Amc SIP Vs Non-Amc SIP.
What is AMC SIP?
Amc SIP is referred to as the systematic investment plan that is managed and offered by an Asset Management Company, which is a financial institution that manages and looks after the operations and process of mutual funds.
The financial institution creates, operates, manages, and markets those mutual fund investment products to the investors. In this SIP, the investor deals directly with the AMC, without contacting any intermediaries like through any broker or any platform.
Each of the AMC products offers a range of schemes, different investment goals, risks, and the strategies along with it.
It helps investors with many benefits like cost averaging, diversification, tax benefits, and more of it.
What is SIP?
An SIP is a systematic investment plan that involves investing a fixed amount of money regularly, can be monthly, or quarterly into a mutual fund. This helps in a better approach in investing in mutual funds or stocks and also helps in managing market risks better.
This helps in promoting financial discipline and stability and is especially designed to cut out the cost of investment over time by giving the option of investing a fixed amount of money.
This SIP option is flexible, affordable investment options, also saves time, are free of entry or exit charges, and more to it. This SIP provided more gates to a broader spectrum of investment possibilities for the investors.
| Aspects | AMC SIP | NON-AMC SIP |
| Process | Deals direct with the AMC. | Requires a broker or any platform to avail SIP. |
| Investment required | Investment amount can vary (not fixed) | Fixed amount to be deposited. |
| Investment period | Monthly, quarterly, or semi-annually. | Can vary between monthly, quarterly, or even weekly. |
| Payment edit option | Do not offer to edit the payment to be paid, the minimum amount is decided by the AMC. | Here, you have the option to either pause or edit the payment. |
| Flexibility | It offers flexibility in investment amounts and frequencies. | It also offers investors the flexibility to choose & invest as per their financial goals and risks tolerance. |
| Rupee cost averaging | Here, you buy more products when prices are low and less when they’re high. | The SIP plan helps in reducing the impact of market unpredictability on the investment, and offers products in both high and low prices. |
| Tax benefits | The investments plans and schemes here are qualified for tax benefits under Section 80C of the income Tax Act. | The SIP plans & installments made here in ULIP or ELSS mutual funds are qualified for tax deductions under Section 80C of Income Tax Act 1961. |
| Products offered | Mutual funds,Money market instruments, Stocks, & other assets. | Bonds,Index funds,Stocks,Mutual funds,and more of it. |
| Calculator | AMC SIP | Non-AMC SIP |
From the above it can be stated that there exists a thin line of difference between the two, although both are nearly identical.
The major difference observed between Amc SIP Vs Non-Amc SIP is that to deal or invest in mutual funds you don’t require any broker or platform in Amc SIP, while in non-Amc SIP, there is an intermediary in the form of broker or the platform.
The amount required to be invested is fixed in non AMC SIP, while in the Amc SIPs, you are not given the option to choose the amount to be invested and the minimum amount to be invested is decided by the AMC.
The other most distinct feature between the two is that, in non-Amc SIP the investor can edit the payment option, which means that they have the right to either pause or edit the payment to be paid and can pay whenever suitable.
While in case of AMC SIP, the investors are not given the option to edit or pause the payment to be paid, and is looked after by the AMCs.
Both the investment plans offer flexibility in investing, which means that investors are given the option to choose the investment option and to adjust their investment according to their financial needs and situation.
Also both offer tax benefits on investments made under Section 80C of the Income Tax Act 1961.
Steps for investing in AMC SIP
Step 1 – On the app chosen, select the fund and tap SIP.
Step 2 – Then select AMC SIP.
Step 3 – After that enter the amount you wish to invest and select the date from which you want to start the investment.
Step 4 – Tap on create AMC SIP and then select create.
Step 5 – The AMC SIP account is created.
Some of the examples of AMC SIP in India are: HDFC Mutual Funds, SBI Mutual Fund, Nippon India Mutual Fund and more of it.
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Steps for investing in SIP
Step 1 – Keep all the documents that are required ready, like ID proof, PAN card, address proof, etc.
Step 2 – Complete the KYC process. Before investing it is important to complete the KYC process according to the rules set by the government.
Step 3 – Now register for a SIP, i.e. first need to register with the Indian broker or financial advisor you wish to work with.
Step 4 – Pick the right investment plan, i.e. choose the best that aligns with your financial goals, risks, and situation.
Step 5 – Select the investment amount you wish to invest. It is crucial to choose how much money you want to invest every month, quarterly, or every week.
This depends on how frequently you need money and how much the cost will be at any given time.
Step 6 – Select the date of SIP, choose the date that is best suited for you to invest.
Step 7 – Final step is to submit the form. After selecting the company or financial institution in which you want to invest, submit the form either online or offline. Now most of the financial institutions or fund houses offer to submit the form online.
Summing Up
Choosing between Amc SIP Vs Non-Amc SIP, boils down to your financial goal, investment plans, risk tolerance, the way you want to invest and control your financial portfolio, etc.
These two terms are nearly the same, but there exists a thin line of difference between both. AMC SIP is free of intermediaries whereas Non-AMC SIP offers more diversification. It depends on the financial goals of the individuals.
