For a salaried person, SIP (Systematic Investment Plan) is one of the best and simplest ways to invest because it aligns perfectly with monthly income. Here’s a clear, practical step-by-step guide for investing through SIP.
1. Firstly Set Your Financial Foundation.
Before starting SIPs, make sure these basics are covered:
Emergency Fund
- Keep 3–6 months of expenses in a savings account or liquid fund.
Insurance
- Health insurance (₹5–10 lakh minimum)
- Term life insurance (10–15× annual income)
SIPs work best when you’re financially secure.
2. Decide How Much to Invest
A simple rule for salaried individuals:
- Start with 20–30% of monthly salary if possible
- If beginner → even ₹2,000–₹5,000/month is perfectly fine
Increase SIP amount whenever:
- Salary increases
- Bonus is received (add a lump sum or new SIP)
3. Define Your Goals (Very Important)
Match SIPs to goals:
| Goal Type | Time Horizon | Suitable Funds |
|---|---|---|
| Short-term (1–3 yrs) | House down payment, travel | Debt / Liquid Funds |
| Medium-term (3–7 yrs) | Child education, car | Hybrid / Large-cap |
| Long-term (7+ yrs) | Retirement, wealth creation | Equity Mutual Funds |
4. Choose the Right Mutual Funds
For most salaried investors, keep it simple:
Beginner-Friendly SIP Portfolio (Example)
- Index Fund (Nifty 50 / Sensex) – 40–50%
- Large & Mid Cap Fund – 20–30%
- Flexi Cap Fund – 20%
- ELSS Fund (for tax saving) – if needed
3–4 funds are enough. Don’t over-diversify.
5. Tax Saving with SIP (Section 80C)
If you want tax benefits:
- Invest in ELSS Mutual Funds
- Lock-in: 3 years
- Tax benefit up to ₹1.5 lakh/year
Better than many traditional tax-saving options for long-term investors as there is lock in period of 3 years only .
6. Pick the Right SIP Date
- Choose SIP date 2–3 days after salary credit
- Ensures no missed SIPs and disciplined investing
7. Stay Consistent & Avoid Common Mistakes
Don’t:
- Stop SIP during market crashes
- Chase “top-performing” funds every year
- Invest without goals
Do:
- Continue SIPs in market downturns (you buy more units!)
- Review once a year
- Increase SIP amount gradually
8. Example SIP Plan (₹50,000 Monthly Salary)
| Category | Amount |
|---|---|
| Expenses | ₹30,000 |
| Emergency + Insurance | ₹5,000 |
| SIP Investment | ₹15,000 |
Over 20 years, ₹15,000/month at 12% ≈ ₹1.5+ crore
9. Best Platforms to Start SIP (India)
- Zerodha Coin
- Groww
- Paytm Money
- Direct AMC websites
Always choose Direct Plans to save on expense ratio also you can invest through AMC offices and Agents