Mutual Funds & Systematic Investment Plan

Saving generally refers to putting money in an interest-bearing account such as a savings account, checking account or certificate of deposit administered by a bank and insured against failure of the banking institution by Deposit Insurance and Credit Guarantee Corporation (DICGC) up to the maximum allowed by law.

Investing, unlike saving, can entail significant risk, and is not insured by DICGC. When you invest, you risk the potential loss of some or all of your money. Investors hope to generate higher returns on invested funds than on savings account deposits because they are taking a greater risk with their investment money. This is the concept behind the trade-off between risk and potential reward. Higher-risk investments have greater potential to pay higher returns, but they are also more likely to result in losses.

Mutual Fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document.

Investments in Mutual Funds are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Mutual Fund issues units to the investors in accordance with quantum of money invested by them. Investors of Mutual Funds are known as unitholders.

The profits or losses are shared by the investors in proportion to their investments. The Mutual Funds normally come out with a number of schemes with different investment objectives, which are launched from time to time. A Mutual Fund is required to be registered with Securities and Exchange Board of India (SEBI), which regulates securities markets before it can collect funds from the public.

These days between work, family, and friends, most of us do not have the time to make or monitor personal investment decisions on a regular basis. Mutual Funds have qualified professionals who do all this for you. This is the reason why, the world over, they have become the most popular means of investing.

Mutual Funds minimize risk by creating a diversified portfolio while providing the necessary liquidity. Additionally, you benefit from the convenience of not having to bother with too much paperwork or repeat transactions. It is our belief that investors differ in their investment needs based on their personal financial goals.

Such as equity funds and stocks as a good choice for funding needs that are five years or more away, income funds to meet medium-term needs and liquid funds for short-term requirements.

No, we do not give any guarantees on the returns on any of our funds.

No. Mutual Fund units are not insured by the government, or any government agency, and do not have any other type of insurance, unlike certain types of savings accounts and certificates of deposit. There is no guarantee that when you sell your units, you will receive what you paid for them. However, because Mutual Fund investments are more risky than insured investments, they generally offer potential for higher long-term returns.

No matter how hard we try, it is rarely possible to predict the short-term movements in the equity market and therefore it is difficult to determine the right time to invest.

Non Residents Indians and Persons of Indian Origin can invest in Mutual Fund schemes in India. In case of NRIs no special approval is required from authorities such as the RBI. They can invest in Mutual Funds on repatriable basis or non-repatriable basis. However there are restrictions on investments depending on the country of residence of the investor.

It's very simple - all you need to do is make a redemption request on Citibank Online or call 24x7 CitiPhone.

The redemption price per unit is the Net Asset Value (NAV) per unit on the relevant day, without any savings.

You get an "account statement" which is similar to a bank passbook. The account statement is a non-transferable document which shows details of all purchases and sales, along with the price at which the purchase or sale was made. It will also show the amount invested and redeemed to date and the number of units held, helping you track your investments.

Yes. Most Mutual Funds and publicly traded stocks are listed in the business section of your local newspaper or in financial publications such as the Economic Times. Mutual Funds are listed in a separate section and are categorised by the stock exchange on which they trade (e.g. the BSE Sensex).

Unitholders will have an option to switch all or part of their investment in one fund to another which is available for investment at that time.

To process a switch, a unitholder must provide clear instructions. Such instructions may be provided through your account via Citibank Online or by visiting your nearest Citibank branch. For assistance, speak with your Investment Counsellor.

Systematic Investment Plan (SIP) is a popular investment strategy available to salaried or regular income group investors among others. Instead of making one lump sum investment, you put in a fixed sum of money each month, over a period of time. You decide the monthly investment amount and the time span of this investment. This system does away with the need to time the market making it attractive for investors. With Citibank, you can invest as little as Rs1,000 a month.

It is necessary to remember that a SIP is not a type of Mutual Fund. It is a method of investing in a
Mutual Fund—an incremental and on-going investment strategy you can adopt to minimize risk while participating in the financial markets.

In SIP the money is invested in a Mutual Fund which invests your money in the stock market and financial instruments such as Bonds.

By opting to invest every month, you invest in a disciplined manner. This results in a disciplined approach to savings. As this is a monthly exercise, you tend to plan your expenditure accordingly.

The SIP reduces the average purchase cost even in volatile stock markets with relative ease. When you invest a fixed amount every month, the number of Mutual Fund units you actually buy depends on their market price. Therefore, with the money you invest each month, you can buy fewer units when the market moves up and more units when the market moves down. This brings down and averages the price of purchase. Over time, your chances of making a profit are much higher when compared to a one-time investment.

Mutual Fund investments are managed by qualified and experienced professionals who have the expertise of investment techniques, backed by dedicated investment research teams.

An entry or exit load is a fee you pay the fund when you buy or sell the units.

An exit load may be charged if you stop the SIP mid-way. These conditions will vary between Mutual Funds.

In the SIP, all you have to do is inform Citibank 15 days prior to the payout. The SIP will be discontinued. You can continue to keep your money with the fund and withdraw it when you want.

Let's say you have invested in the SIP option of a diversified Equity Fund.

If you sell the units after a year of buying, you pay no capital gains tax. If you sell it before a year, you pay capital gains tax of 15%.

Let's say you invest through a SIP for 12 months: January to December 2013. Now, in February 2014, you want to sell some units.

The system of first-in, first-out applies here. So, the amount you invest in January 2013 and the units you bought with that money will be regarded as the units you sell in February 2014. For tax purposes, the units that you sell first will be considered as the first units bought.

You can participate in the Systematic Investment Plan (SIP) of Citibank Funds by investing a minimum of Rs1,000 or more either on a monthly or quarterly basis. We will add units to your account (subject to funds availability in your account) at the prices prevailing either on the X or the Y (date of month) as may be applicable. You would receive a statement of account for each such transaction.

First, you need to open an Investment Services Account with Citibank. Post account opening, and your mandatory KYC details verification, you can pick up a Common Transaction Form (CTF) from any of our branches. Fill the form and deliver it to the nearest Citibank branch. We will set up SIP and your Account will automatically get debited each month for the amount specified by you for investment into funds you have chosen.

Existing investors of Citibank Mutual Funds keen to start with a SIP can do so for fundhouses with which they already have holdings. To set up a SIP for a fresh fund you need to complete the Investment Common Transaction Form (CTF) and submit it to the nearest branch.

The price of purchase of the units is the NAV on day of the execution.*

*Based on cut-off times for different fund types.

In case of insufficient balance in the Account, the SIP for that month will not get executed. However, it will continue in the subsequent months subject to sufficient balance in the Account. Hence, to obtain the maximum benefit of SIP, please ensure sufficient balance in your Account.

There are no charges for monthly SIP amounts up to Rs.25,000. For SIP amounts over Rs25,000 a month, the  standard equity transaction fees will be charged.

On execution of your instruction, you will receive a confirmation on the investment made with details of amount invested, price of purchase, fund details and number of units purchased.

You will get your SIP details through Citibank Online Banking or at your nearest Citibank branch.