How to Start a Monthly SIP of Rs. 500 with Mutual Funds

Starting a Systematic Investment Plan (SIP) with as little as Rs. 500 per month has never been easier. Many Asset Management Companies (AMCs) accept this amount, and even some allow even lower minimums like Rs. 100. If you are new to mutual funds, it is essential to understand the process, especially how to set up an account and initiate your SIP.

Easiest Ways to Start a SIP with Rs. 500

If you are comfortable with mobile apps, most mutual fund apps provide an easy way to start SIPs. However, it is crucial to choose direct plans to avoid additional costs. The process can be streamlined online as well, making it convenient for busy individuals.

Alternative Methods for Initiating SIP

For those preferring traditional methods, here’s how to get started:

Step 1: Choose Your Fund
First, select the mutual fund you wish to invest in. For example, the Ipru Bluechip Fund. Visit the fund company’s office or the CAMS office to obtain the necessary forms. Step 2: Fill Out the Form
Fill in the form with all the required details, including identity documents like a photo, PAN card, and Aadhar card. Step 3: Submit Initial Cheque
Attach a cheque for the first installment. You can pre-determine the amount based on the minimum SIP requirement. Step 4: Complete Submission
Submit the completed form and attached documents at the specified office.

While many funds are offering low starting amounts, it is also important to understand the returns and disclaimers. Aim for a profit margin of around 11% to 12% on your investment. This is particularly relevant if you are planning to invest for a minimum of five years, as the value of your money must appreciate by at least 5% to account for inflation over that period.

Considering Inflation for Long-term Investments

Historically, prices have increased significantly over time, often due to inflation. For example, a piece of land that might have cost Rs. 1000 in the 1980s can now be as little as a cup of coffee in 2017. Therefore, when investing, always consider the impact of inflation on your returns.

By investing early and consistently, you can potentially outpace inflation and secure a better return on your money. Always have a clear understanding and a long-term vision while investing your hard-earned money.

Thank you for taking the time to read this guide. If you have any questions, feel free to reach out for further information.