How to Start SIP Investment in India: Guide for Beginners
Are you tired of scratching your head thinking, "How to start SIP in India if you are a beginner?" You have come across this complete guide, which will give you a step-by-step process for investing in SIPs, what factors to consider and which SIP plan is best for beginners.
It is time to put your mobile phone on DND and get ready to uncover some start investment tips to plan a strong portfolio for 2025.
What is SIP (Systematic Investment Plan)?
In the Mutual Funds landscape, SIP is short for "Systematic Investment Plan", a way to invest a fixed sum into a scheme of your choice monthly, quarterly or yearly.
It is the best investment technique to invest your hard-earned money and multiply it by 2X returns over the years.
But if you are a beginner, you might wonder, "How to start SIP investment?" Wouldn't some smart investment tips help?
This post has you covered. In the next heading, learn the step-by-step process to start SIP in India.
How to Invest in SIP as a Beginner?
The below mentioned is a step-by-step process explaining how to start SIP in India if you are a beginner:
(Picture of process)
Step 1: Collect All Required Documents
The first thing to do is to prepare all the necessary documents in a stick file before you start SIP. Here is a list of everything you will need:
- PAN Card
- Aadhar Card
- Address Proof (Any utility bill or ration card will do)
- Bank Proof (passbook)
Note: Make sure your bank account and number are correct; do get photocopies of all the documents.
Step 2: Get Your KYC Verified
It is mandatory for every investor, especially beginners, to follow the KYC guidelines set by the government of India. You can complete your KYC (Know Your Customer) online and offline. Click here to know more.
Step 3: Register for Systematic Investment Plan
To start SIP in India, you must be registered with an Indian broker or financial advisor you wish to go with on this financial journey. After this, you will have N number of mutual funds schemes to start SIP investments.
Step 4: Invest in the Best Plan for Long Term
This is the most important step that involves choosing the right scheme that keeps your desired goals and investment in one line. Get the Best Mutual Funds shortlisted by experts.
Step 5: Set SIP Amount You are Comfortable With
You need to fix an amount that is taken from your bank account every month or at the interval you choose. So, carefully decide how much money you can spare and how fast you want to reach your desired goals.
Step 6: Select Your SIP Investment Date
Choose the SIP date on which the money will be deducted from your account, for example, if you work in a corporate you can set your SIP instalment the day after your salary is credited.
If you are a beginner, start by learning, "how to select the Best date for SIP?
Step 7: Submission of Your Form
The final step is submitting your application to start SIP as soon as possible. You can complete this process offline as well as online depending on the AMC (Asset Management Company).
Is it Good to Invest Money on SIP
Yes, investing in a Systematic Investment Plan (SIP) is a great way to grow your money. Here is why:
-
Helps You Save Automatically
With SIP, you invest a fixed amount of monthly, quarterly or yearly. It automatically helps you save before you spend, making it easier to stick to your savings plan.
-
Start With Small Amounts
You do not need a lot of money to start. You can begin investing with just Rs.100 per month. This means anyone, even with a small income, can start investing.
-
No Need to Worry About the Market
SIP helps you avoid the stress of trying to figure out the right time to invest. Whether the market is up or down, you invest the same amount each month, so the risk of bad timing is lower.
-
Benefit from Compounding
As your investment grows, the returns (profits) you earn are added to your investment. Over time, this helps your money grow even faster.
-
Flexible Payments
If you ever need to skip a month, you can do so without any penalties. You do not get this flexibility with traditional investments like fixed deposits.
-
Step Up SIP to Save Extra
If you start earning more money, you can increase your SIP amount using the Step Up SIP Calculator Tool or start another one. This lets you take advantage of extra income.
-
Less Emotional Investing
SIP helps you stay calm and do not make impulsive decisions depending on short-term changes in the market. It keeps you focused on long-term growth.
-
Good for the Long-Term
If you keep investing in an SIP for many years, it can lead to big returns. For example, a monthly investment of Rs.3,000 could grow to Rs.35 lakh in 15 years.
Smart Investments, Bigger Returns
What Factors Should I Consider Before Starting an SIP?
Before you start an SIP (Systematic Investment Plan), there are a few important things to think about:
-
Your Financial Goals
Think about what you want to achieve with your investments. Do you want to save for your retirement, an emergency fund or a big purchase like a house or car? Understanding your goals will help you decide how much to invest and which type of fund is right for you.
-
How Long You Plan to Invest (Investment Horizon)
How long do you want to keep your money invested? If you are planning for something in the near future, like 3-5 years, you might want to take less risk. But if you are investing for something long-term, like retirement, you can start SIP in Small Cap Mutual Funds that offer high rewards for higher risk.
-
How Much Risk You Can Handle (Risk Appetite)
Before investing, you need to know how much risk you’re comfortable with. This depends on how much money you can bet in the mutual funds volatile market without affecting your daily life or goals. For example, if you have Rs.10,000 in expenses every month, you might decide you can safely invest Rs.2,000-3,000 without worrying too much.
-
Estimate Your Returns
Use an SIP calculator to estimate how much you need to invest each month to reach your goal. The calculator will show how much your investment will grow over time, depending on the amount you invest and the number of years you plan to invest.
Must Read: 11 Common Mistakes to Avoid While Investing Mutual Funds
By keeping these points in mind, you can start SIP investment in India wisely and make better investment choices.
Which SIP Plan is Best for Beginners?
Here are the best SIP plans most appropriate for a beginner:
| Scheme Name | Launch Date | AUM (Cr as of 31.01.25) | 3 Year Returns (%) | 5 Year Returns (%) |
|---|---|---|---|---|
| Nippon India Large Cap Fund | 08.08.2007 | 35,667 | 14.90% | 19.33% |
| ICICI Prudential Large & Mid Cap Fund | 09.07.1998 | 18,624 | 18.57% | 22.53% |
| Nippon India Multi Cap Fund | 25.03.2025 | 37,593 | 17.54% | 23.99% |
| ICICI Pru Value Discovery Fund | 05.08.2004 | 48,400 | 17.31% | 21.79% |
| ICICI Pru Multi Asset Fund | 31.10.2002 | 52,760 | 17.07% | 20.43% |
*As on 01-01-2025
To Conclude Beginner's Guide to Systematic Investment Plans
In short, this post gave you a full understanding of how to start SIP Investment in India even if you are a beginner. Starting your systematic investment plan is much easier than you thought and with the best mutual funds in your portfolio, financial security with long-term returns can go a long way.
Related Reads:
