Investing in mutual funds through SIP (Systematic Investment Plan) is one of the most popular and disciplined ways to build wealth in India. Whether you’re planning for retirement, buying a house, or building an emergency fund, SIPs make investing simple and affordable.
But the common question every beginner asks is: “How much should I invest in SIP monthly?” Let’s break it down with practical tips.
What is a Mutual Fund SIP?
A Systematic Investment Plan (SIP) allows you to invest a fixed amount of money at regular intervals (usually monthly) in a mutual fund.
Minimum SIP starts at ₹500 per month in most funds.
Money gets auto-debited from your bank account.
You buy units of the mutual fund based on the market NAV (Net Asset Value).
Why Invest Through SIP?
✅ Affordable – start with just ₹500 per month
✅ Rupee cost averaging – reduces risk by spreading investments
✅ Power of compounding – wealth grows exponentially over time
✅ Disciplined investing – no need to time the market
✅ Goal-based planning – ideal for retirement, education, travel, etc.
How Much Should You Invest Monthly in SIP?
The right SIP amount depends on your income, goals, and time horizon.
Step 1: Define Your Goal
Retirement corpus
Buying a house
Child’s education
Emergency fund
Step 2: Calculate Time Horizon
Short-term (3–5 years)
Medium-term (5–10 years)
Long-term (10–20+ years)
Step 3: Use a SIP Calculator
For example:
If you want ₹50 lakhs in 15 years and expect a 12% return, you need to invest around ₹10,000/month.
If you want ₹1 crore in 20 years, you should invest about ₹7,500/month at 12% expected returns.
👉 Formula to estimate: Monthly SIP = Future Goal ÷ [((1 + r/n)^(nt) – 1) / (r/n)]
(where r = return rate, n = frequency, t = time)
General Rule of Thumb for SIP Investments
Start with at least 20% of your monthly income in SIPs.
Increase SIP amount yearly as your income grows (step-up SIP).
Don’t put all SIPs in equity; diversify into debt/hybrid funds too.
SIP Examples Based on Income
If earning ₹30,000/month → Invest ₹3,000–₹5,000 in SIPs
If earning ₹50,000/month → Invest ₹7,000–₹10,000 in SIPs
If earning ₹1,00,000+/month → Invest ₹20,000–₹25,000 in SIPs
FAQs –
1. What is the minimum SIP amount?
Most mutual funds allow SIPs starting from ₹500 per month.
2. Can I change my SIP amount later?
Yes, you can increase, decrease, or stop your SIP anytime.
3. How much SIP is enough for ₹1 crore?
If invested for 20 years at 12% return, about ₹7,500/month is needed.
4. Is SIP better than lump sum investment?
For beginners, SIP is better as it reduces risk and builds discipline.
5. Which type of mutual funds are best for SIP?
Equity mutual funds for long-term wealth, debt funds for stability, hybrid for balanced growth.
Published on : 28th August
Published by : SMITA
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