How to Start SIP Investment: A Beginner-Friendly Guide for Long-Term Growth

🗓️ 28th May 2025 🕛 3 min read
  • Understand what SIPs are and why they’re ideal for long-term investing.
  • Learn how to start a SIP, step-by-step, including online setup.
  • See how SIPs build wealth through rupee cost averaging and compounding.
Related Topics
SIP Calculator Retirement Planning Tax-Saving Investments
Mayank Bhatnagar
by Mayank Bhatnagar
Co-Founder & COO
Start Your Investing Journey!
Connect with an Expert
Table of Contents
Category - SIP Investing

If you're wondering how to start SIP investment, you're not alone. SIPs, or Systematic Investment Plans, have become one of the most popular tools for long-term wealth creation in India. They’re simple, disciplined, and powerful - especially for those earning monthly incomes and looking to grow their savings through mutual funds. This guide explains how SIPs work, how to get started (both online and offline), and why they are trusted by millions of investors for goal-based financial planning.

What is a SIP and How Does it Work?

A Systematic Investment Plan (SIP) allows you to invest a fixed amount at regular intervals, typically monthly, into a mutual fund scheme. This method automates your investments and encourages disciplined financial behavior.

Example

Meera sets up a SIP of Rs. 5,000/month in a diversified equity mutual fund. Every month, that amount gets automatically debited from her account and invested into the fund. Over time, she accumulates more units, more when markets are low, fewer when markets are high, helping her average out her purchase cost.

Features of SIPs That Make Them Ideal for Investors

  • Low minimum investment: SIPs can be started with as little as Rs. 100 per month.

  • Flexibility: You can increase, pause, or stop SIPs whenever you need to.

  • Rupee cost averaging: Investing across market cycles helps average out your cost per unit.

  • Power of compounding: Small amounts invested over long durations can snowball into significant wealth.

  • Step-up option: You can automatically increase your SIP amount annually as your income grows.

Pro Tip

Starting early and staying consistent are the two golden rules of SIP investing.

 

How to Start an SIP Investment: Step-by-Step

1. Define Your Financial Goal
Whether it’s your child’s education, your retirement, or buying a house; have clarity on what you’re investing for.

2. Choose the Right Mutual Fund Scheme
This depends on your time horizon and risk appetite. Equity funds work well for long-term goals, while hybrid or debt funds are better for short-term needs.

3. Decide the Monthly SIP Amount
Use a SIP calculator to estimate how much you need to invest to meet your goal.

4. Complete Your KYC
You’ll need to complete KYC (Know Your Customer) with PAN, Aadhaar, and address proof. Most platforms let you do this digitally.

5. Set Up Auto-Debit Mandate
Link your bank account and allow auto-debit for the SIP amount on a specified date each month.

6. Track and Review Annually
Stay the course, but review your SIPs once a year to see if they’re aligned with your goals.

How to Start an SIP Online

Most Asset Management Companies (AMCs) and investment platforms make it easy to set up SIPs online. Here’s how:

  • Visit the AMC website or a trusted intermediary platform.

  • Register or log in with your credentials.

  • Choose the mutual fund scheme and opt for SIP instead of lumpsum.

  • Enter SIP details: amount, frequency, start date, and end date.

  • Set up a one-time e-mandate to authorize automatic debit.

  • Confirm your investment and receive a confirmation on email/SMS.

Make sure your account has sufficient balance at least 1–2 days before SIP debit date to avoid rejections.

Why SIPs are Better Than Lumpsum Investments for Most People

While lumpsum investing has its place, SIPs offer these advantages:

  • Lower risk: You avoid investing all your money at a market high.

  • Budget-friendly: Matches your monthly cash flow.

  • Behavioral edge: Reduces temptation to time the market.

Long-term data shows that SIPs deliver strong outcomes even through volatile markets.

Real-World SIP Growth Example

Let’s take a case of someone investing Rs. 10,000/month through SIP in a well-performing mutual fund:

  • Duration: 25 years

  • Total invested: Rs. 30 lakhs

  • Corpus grown: ~Rs. 2 Crores at ~13% CAGR

This period includes major market events like the Dot Com crash, Global Financial Crisis, and COVID-19. Despite ups and downs, SIPs rewarded patience and discipline.

Things to Keep in Mind Before Starting Your SIP

  • Don’t stop SIPs during market dips; that’s when they’re most powerful.

  • Link SIPs to specific financial goals.

  • Avoid starting SIPs in unsuitable products like ULIPs or traditional insurance plans.

  • Reassess your SIPs if your goals, income, or risk appetite changes.

FAQs

Yes, most platforms allow you to modify the SIP amount or even step it up automatically every year.
Missing a payment occasionally doesn’t cancel the SIP, but repeated misses may lead to mandate cancellation. Ensure your bank account has adequate balance.
For long-term goals, SIPs in mutual funds have historically offered higher inflation-beating returns than fixed deposits.
As long as your financial goal requires. For long-term wealth creation, ideally 10 years or more.

Your Investing Experts

Continue Reading

Are Mutual Fund SIP Investments Low Risk?
Are Mutual Fund SIP Investments Low Risk?

Many first-time investors believe that SIPs are a low-risk way to enter the market. But is that really true? The idea that SIPs offer guaranteed safety can be misleading, especially if the underlying fund is equity-oriented. This blog breaks down the real risk profile of SIPs and helps you understand how they work in volatile markets.

🕛 3 min read 🗓️ 8th July 2025
What are the Different Types of SIPs? How to Use Step-Up SIP to Reach Your Financial Goals Faster
What are the Different Types of SIPs? How to Use Step-Up SIP to Reach Your Financial Goals Faster

SIPs (Systematic Investment Plans) are a cornerstone of goal-based investing in India. But did you know that there’s more than one type of SIP? From the simplicity of Regular SIPs to the adaptability of Flexible SIPs, and the acceleration potential of Step-Up SIPs, there’s a strategy for every kind of investor. In this blog, we’ll explain the different types of SIPs and show you how a Step-Up SIP could help you reach your financial goals faster.

🕛 3 min read 🗓️ 8th July 2025
What Is the Real SIP Return After 10 Years? The Truth Long-Term Investors Should Know
What Is the Real SIP Return After 10 Years? The Truth Long-Term Investors Should Know

In recent years, SIPs (Systematic Investment Plans) have gained immense popularity among Indian investors seeking long-term wealth creation. But how have SIPs actually performed over a decade? If you're wondering what the average SIP return in 10 years really looks like, and whether it's enough to meet your financial goals, this blog breaks down the numbers and what they mean for your future.

🕛 3 min read 🗓️ 8th July 2025