How much to invest in SIP every month?

The secret to building capital is not limited to earning more. It depends on the investment decisions you make to grow those earnings. Mutual Fund Investment Plans provide the perfect getaway for this. They let you consistently gain with the right investing strategies. However, being a wise investor goes beyond holding the maximum shares. You must understand your risk appetite, expectations, investment goals, etc. 

Now, most of us wait until we have surplus funds to invest. However, not all have accumulated corpus. Hence, Mutual Fund let you regularly invest through a Systematic Investment Plan. You have the flexibility to decide the time, amount, and number of SIPs for the selected scheme. You can calculate the appropriate amount with a SIP calculator. Here are some tips for using it rightly:

Identify your needs

Be clear about your investment goals as an investor. You cannot afford to make arbitrary decisions as it has hefty consequences owing to market risks. Hence, like other investments, understand your needs before investing in SIP. For this, analyse your budget to check how much you can invest every month. Additionally, check your monthly expenditure to plan your budget accordingly. 

Compare returns 

The investment goal in Mutual Funds is lucrative returns. Use this motive as insight to choose the correct SIP amount. Deploy funds that yield the highest returns. Using a SIP calculator is an excellent method to calculate the outcomes of different investment amounts. This helps you make easy comparisons of returns. Also, fund houses personalise such calculators to communicate their offers for the invested amount. 

50:30:20 rule

As an earning individual, you have many responsibilities. Hence, plan your spending wisely. Implementing the 50:30:20 rule lets you spread your investments for the same. Based on this, 50% of your income gets spent on needs, 30% on wants, and the remaining 20% is sufficient to build an emergency corpus. Use the 20% to entirely invest in SIPs or spread it across different investment instruments. 

Plan long-term

Mutual Funds have a reputation for being risky. However, they are the best avenue for future planning. The right approach is to stay invested for the long term. Ideally, opt for an investment horizon of at least five years. The rest gets managed with the power of compounding that appreciates over the term. Once you decide the duration, planning the monthly contribution with the SIP calculator is a breeze. 

Consider taxation

Besides returns, also check the tax deduction while planning your investment. Ideally, you get a minimum 10% to 12% post-tax return if you stay invested for the long term. But to get an accurate understanding, study the Mutual Fund scheme you choose carefully. You also get to check such estimated returns with the calculator for easy understanding. Use it and deduct the tax payable before investing. 

Disclaimer – ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. – ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai – 400 025, India, Tel No : 022 – 6807 7100.  AMFI Regn. No.: ARN-0845. We are distributors for Mutual funds. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund related services are not Exchange traded products and I-Sec is just acting as distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein mentioned are solely for informational and educational purpose.


Ajay Deep

Ajay Deep is a young enthusiast who Loves Chandigarh and is always eager to make this beautiful city even more beautiful. A Mechanical Engineer By Chance and Working in an IT MNC by Choice. A Writer, Photographer and a Budding Entrepreneur. A Designer, Developer and Digital Marketing Expert. In brief : A Jack of All Trades and Master of Few :) You may reach Ajay Deep at
Back to top button