Online brokerage firm Zerodha has launched a feature that will help the investors to set up stocks and ETFs SIP on the Kite Web portal. Through this feature, users will be able to select the stocks and ETFs and invest in them in a SIP way. Let’s explore this Stock SIP on Zerodha Kite and have a look at how it is done.
Nitin Kamath, the founder of Zerodha had announced this feature on 7th January 2021 via tweet. Below is the tweet posted by the founder declaring the availability of this feature on the Kite web portal. He also added that the same feature will soon be available on the Kite mobile app.
You can now set up SIPs on stocks and ETFs on Kite web. This is in beta and will soon be available on Kite mobile. SIPs are set on baskets. So, you can create SIPs on a diversified basket of stocks & ETFs for each of your goals. https://t.co/ieGYrjSVcP pic.twitter.com/VO15A9aj1l
— Nithin Kamath (@Nithin0dha) January 7, 2021
Stock SIP on Zerodha Kite
Before we check the Zerodha Kite application, let’s quickly understand what is stock SIP.
Stock SIP is an easy method of investing in stocks. It helps investors to buy stocks based on the amount or the quantity periodically in a systematic manner. If you are a long-term investor, this method of accumulating quality stocks and building a strong portfolio will certainly for you. In other words, it is a disciplined investment strategy for long-term investors.
Before you buy stocks through Zerodha stock SIP, you need to first set up the ‘basket’. This is nothing but the process of selecting the stock, deciding on investment schedule, stock quantity, etc.
To set up a SIP, you will need to go to Orders > SIP > Create a new SIP. You can either link an existing basket of orders or create a new basket.
Once the basket is created, you can setup the schedule of the stock SIP as shown in the below image.
Zerodha Stock SIP – Few Points to Consider
- You need to link the existing stock basket to the SIP schedule.
- A maximum of 20 orders can be added to the basket and a maximum of 20 baskets can be created on one Client ID.
- Users can set up to 5 schedules every 30 minutes on trading day.
- The schedule timing would be 9 am to 3 pm on trading day.
- Only one SIP per day per time slot is allowed.
- If your scheduled date falls on a holiday, your SIP order will be sent to the exchange on the next trading day.
- You can pause, edit and delete the stock SIP through the Kite web portal.
- You can use the funds available in your account for funding this stock SIP.
- You can also make use of the e-mandate to fund your Stock SIP.
Benefits of Zerodha Stock SIP
- You can invest in the stocks in a systematic way.
- Stock SIP can be scheduled for any trading day.
- User will have an option to set the SIP time schedule.
- Easily editable, or you can even delete the same.
- You can use this facility for even systematic withdrawal from the stocks.
- You can transfer the stocks and rebalance your portfolio.
- You will get the reminder e-mail 2 days prior to your SIP date.
- Existing fund available in your account can be use.
- Leverage the market timing and create a strong portfolio for long term.
Stock SIP vs Mutual Fund SIP
Most of you have heard the mutual fund SIP. Now let’s see whether it is better as compared to the stock SIP or not? Whether you should invest in the market through stock SIP or not?
Below is the comparison between Stock SIP and Mutual fund SIP.
| Stock SIP | Mutual Fund SIP |
|---|---|
| Suitable for the novice investor | Suitable for the first-time investor |
| Freedom of choosing the stock | Invest in the pre-defined stocks |
| No expense ratios to be paid | Expense ratio to be paid to AMC |
| Probability of higher returns | Probability of moderate returns |
| No exit load kind of thing | Exit load as applicable |
| No diversification of segment | Offers diversification |
If you are a seasoned investor, you can try your hands in stock SIP. Because by this time you have known the market trends and risk associated with the stock investment. So if you want to invest for the long term and for higher return, you can try investing through stock SIP.
Zerodha Stock SIP – FAQs
For setting up the stock SIP in Zerodha Kite, you need to first set up the stock basket on the Kite portal wherein you can select the stocks of your choice and buy it on a set intervals.
You can select 20 stocks in 1 basket, and you can have 20 such basket in your portfolio. This can be done through existing Kite portal.
This feature is currently available on the Kite web portal only, but the same will be available on the mobile app soon.
Yes, you can change the SIP date or even delete the same as and when you want.
If your scheduled date falls on a holiday, your SIP order will be sent to the exchange on the next trading day.
You can set up 5 SIP for every 30 minutes of slot. The SIP schedule would be from 9:30 am to 3 pm on trading day.
Currently it is not available for stock SIP to track profit/loss separately. but the same will soon be available.
No, there is no additional charges for buying stocks through stock SIP on Kite.
Stock SIP on Kite is scheduled based, however, the limit order would also work on stock SIP.
No, as of now you can buy only individual stocks through this SIP.
No, its not possible right now.
Yes, you can define the stock SIP by the amount you want to invest in it.
Conclusion
The new feature of stock SIP is a great tool for the people who wants to build the portfolio for the long term and create wealth. This feature is suitable for the novice investors who have a good knowledge of buying stocks by them selves. Give it a try if you want to accumulate quality stocks for the long term. Share your feedback on this feature in the comment box below.