If you have recently opened a Demat account, you have taken a big step towards smart investing. The majority of individuals find it challenging to monitor performance and manage their investments consistently. You may eliminate emotional decision-making, save time, and ensure that your financial objectives are met by automating your investments. If you have not taken the first step yet, now is the perfect time to open Demat account and get started on your investment journey.
This blog post will explain how to automate your investments after opening a Demat account. From mutual fund SIPs to auto-debit mandates, here is all the information you need to accumulate wealth automatically.
Investment automation is the process of setting up your financial investments to run on a predefined schedule without requiring manual intervention every time. It includes:
● Scheduling regular purchases of mutual funds, stocks, or ETFs.
● Automatically transferring money from your bank to your trading account.
● Rebalancing your portfolio periodically based on pre-set rules.
It is easy to miss a good investment opportunity in the share market or forget to invest altogether. Automation ensures:
● Consistency: Regular investments mean you don't try to time the market.
● Discipline: You stick to your financial plan without relying on willpower.
● Time-saving: You do not need to log in and make transactions every month.
● Reduced emotional bias: Automation removes panic buying or selling.
Automating your investments simplifies wealth creation by ensuring consistent, disciplined contributions without manual effort. Once your Demat account is active, it will be easy for you to set up SIPs, auto-debits, and portfolio strategies for upcoming IPOs to grow your money efficiently and stay consistent with your financial goals.
Once your Demat and trading accounts are active, the first process is to link your bank account. This is essential because your investment purchases need a funding source.
Most brokers allow you to link your savings account during the account opening process itself. If not, you can usually do this later via net banking or by submitting a form.
Once linked, you can authorise automatic fund transfers, which are crucial for automation.
Systematic Investment Plans in mutual funds are one of the simplest and most popular ways to automate investing. Here is how it works:
➔ Choose the right mutual funds that depend on your risk profile and goals.
➔ Set the SIP amount.
➔ Select the frequency based on monthly or quarterly.
➔ Authorise an e-mandate to allow your broker or fund house to auto-debit your account.
While SIPs in stocks are not as common as mutual funds, several brokers now offer stock SIPs. This means you can schedule the purchase of certain stocks at regular intervals.
For instance, you may want to buy ₹1,000 worth of stock for both Infosys and HDFC every month. Various platforms provide this feature. Here is what you will usually need to do:
➔ Select the stock and amount.
➔ Choose the frequency, that is, weekly, fortnightly, or monthly.
➔ Confirm the mandate.
Over time, your portfolio may drift away from your intended asset allocation. For example, if equities outperform debt, your risk level may increase unknowingly. That is where auto-rebalancing helps.
Some platforms offer goal-based investment tools that automatically rebalance your portfolio based on:
➔ Time left to the goal
➔ Market performance
➔ Risk profile changes
While automation handles investing, staying informed is equally important. Most broker platforms offer:
➔ Email/SMS alerts for investment transactions.
➔ Monthly portfolio reports are sent to your inbox.
➔ Performance trackers to see how your investments are doing.
If you are worried about maintaining sufficient balance for SIP debits, consider:
➔ Setting up a Recurring Deposit (RD) aligned with your SIP dates.
➔ Using a sweep-in savings account where idle money earns FD-like interest but is liquid.
Automation does not mean "set and forget" forever. It means to set and review periodically.
➔ Every 3-6 months, review your goals, asset allocation, and fund performance.
➔ If your income or expenses change, update SIP amounts accordingly.
➔ Revisit risk levels and adjust the investment instruments if needed.
Your first step into the world of investing is to open Demat account. However, consistency is necessary to increase your wealth, and automation offers just that. Establishing a financial routine that operates in the background can be achieved by making stock purchases, SIPs, rebalancing, and notifications.
Automated investing helps you achieve your goals, one step at a time, whether your goal is retirement, home ownership, or building a corpus for your child's education.
Yes, many platforms offer goal-based investment options where you can automate contributions for multiple financial goals simultaneously.
The transaction may fail, and you could incur a penalty or miss that month's investment. Using a sweep-in or recurring deposit account as a buffer can help avoid this.
No, once you set up an SIP with an auto-debit mandate, the investment amount is automatically deducted and invested at the scheduled time.
Yes, many brokers offer stock SIP features that allow you to buy selected stocks in fixed amounts or quantities at regular intervals.
You can pause, stop, or change the amount of your SIPs or stock investments at any time through your broker’s app or website.
Disclaimer: This content is part of a marketing initiative. No TNIE Group journalists were involved in the creation of this content.