In today’s time, both financial security and wealth creation have become important. But if you do not have much money or do not want to make a big investment at once, then SIP (Systematic Investment Plan) is a smart option.
In this blog, I will explain to you in a simple way what is SIP, how it works, and how you can start your first SIP in India – without any financial background.
What is SIP?
SIP stands for Systematic Investment Plan. It is a method where you invest a small amount of money every month in a mutual fund. You can start SIP with just ₹500 minimum amount.
The advantage of SIP is that:
You do not have to invest lump sum (large amount)
Risk of market ups and downs is reduced (rupee cost averaging)
Your money grows in long term through compound interest
How does SIP work?
Suppose you invest ₹1000 every month in a mutual fund through SIP.
Every month ₹1000 is deducted from your bank account and invested in that fund.
Every time you get units as per the NAV (Net Asset Value) of the mutual fund.
When the market is low, you get more units. When the market is high, you get fewer units.
With time, your total units and their value grow.
This process is automatic, and you can track your investment from a mobile application or website.
What is required to start SIP?
To start SIP, you will need to keep some basic things ready:
1. ✅ PAN Card
2. ✅ Aadhaar Card (linked with mobile)
3. ✅ Active Bank Account (Net Banking enabled/UPI enabled)
4. ✅ KYC (Know Your Customer) process should be completed
5. ✅ Mutual Fund Platform Account (Zerodha Coin, Groww, Paytm Money, fundzbazar etc.)
You can complete KYC online in 5–10 minutes with Aadhaar OTP verification and video KYC.
Step-by-Step Process to Start SIP
Step-by-Step Process to Start SIP
Let’s now see in detail how to start SIP:
✅Step 1: Choose the Right Platform
You can also start SIP directly from the mutual fund website (like ICICI, HDFC, SBI Mutual Fund..etc) or from third-party apps like:
Groww
Zerodha Coin
Paytm Money
Fundzbazar
ET Money
Apps are beginner-friendly and you can easily compare multiple funds.
✅Step 2: Understand the Risk Profile
Your risk profile is important:
Are you:
👉Are you a low risk investor? (Want stable returns like FD)
👉Are you a medium risk investor? (Can manage some fluctuation)
👉Are you a high risk investor? (Want long-term growth, ups and downs are common
👉You should choose the fund on this basis.
✅Step 3: Decide SIP Amount
You can start SIP with minimum ₹500. Look at your monthly income, expenses and savings and decide how much you can invest regularly.
Tip: Your monthly SIP is perfect if it is 10–20% of total income.
✅Step 4: Choose Fund
Choose fund according to your goal and risk:
Fund Type for whom is best
Large Cap Funds Beginners, low risk investors
Flexi Cap Funds Medium risk, long-term investors
ELSS (Tax Saving) Funds Tax benefit + 3 years lock-in period
Index Funds Long-term, passive investors (low expense)
Hybrid Funds Balanced risk-return (mix of debt & equity)
✅Compare:
👉Past performance (3–5 years)
👉Fund manager track record
👉Expense ratio
👉fund size
✅Step 5: Start SIP
Click on “Start SIP” on the app
👉Select Fund
👉Choose Monthly date (e.g., 5th of every month)
👉Set Amount (e.g., ₹1000)
👉Authorize Auto-debit (E-Mandate via net banking)
That’s it! Your SIP has started. Now investment will be auto-debited from your account every month.
How long should I run a SIP?
How long should I run a SIP?
There is no benefit in stopping a SIP in the short term. If you invest consistently for 5–10 years or more, you will see the real magic of compounding.
Set the duration according to your goal:
Retirement Planning: 15–20 years
Child Education: 10–15 years
Wealth Creation: Minimum 5–7 years
Common mistakes of SIP that should not be done
1. ✅ Stopping SIP if there is no return in 1-2 years
2. ✅ Investing in funds without comparing
3. ✅ Trying to time the SIP (when the market will be high/low)
4. ✅ Taking too many funds at once (3-4 funds are enough)
Final Tips for Successful SIP Investment
Maintain consistency: Let the SIP grow with time
Top-up: Increase the SIP amount every year as your income increases
Reinvest returns: Don’t take the dividend option in mutual funds, choose a growth plan
Review yearly: Review your SIPs every 12 months
Conclusion
SIP is a simple, affordable and powerful tool that anyone can use to achieve their financial goals – whether you are a student, working or self-employed.
With a little patience, discipline and right guidance, you too can start your wealth journey with SIP.
If you are still confused about which fund to take, or how to start, our experts are ready to help you. Contact FinSecurePro!
If you found this guide helpful, do share it with your friends
Let us know by commenting – When are you going to start your first SIP?Message me at