How to Start SIP in Mutual Funds in India: A Beginner’s Guide for Gujaratis

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  By Gujju Ticks

  15 May, 2025

Introduction: Why SIPs Are Gaining Popularity Among Gujaratis

Systematic Investment Plans, or SIPs, have become a popular investment choice among Indian households in recent years, especially among Gujaratis who are financially astute. The explanations are straightforward: the possibility of long-term wealth creation, flexibility, and disciplined investing.

From selecting the best plan to opening an account and comprehending returns, this beginner's guide will teach you everything you need to know about starting a systematic investment plan (SIP) in mutual funds in India if you're a Gujarati person wishing to start investing wisely.

What is an SIP (Systematic Investment Plan)?

An SIP is a mutual fund investment strategy in which you make fixed monthly investments. A concept known as rupee cost averaging enables you to purchase mutual fund units without being concerned about market volatility.

Why it's ideal for beginners:

• No need to time the market

• Low minimum investment (as low as ₹100 or ₹500 per month)

• Encourages regular savings

• Compounding helps grow wealth over time

Benefits of SIP for Gujarati Investors

1. Low Entry Barrier:

You can begin with as little as ₹500 a month. Because of this, even students and novice investors can access it.

2. Rupee Cost Averaging:

Over time, you average out your cost by receiving more units in a low market and fewer in a high one.

3. Compounding Power:

Compounding allows your returns to increase over time.

4. Tax Benefits:

Section 80C provides tax deductions for SIPs in ELSS (Equity Linked Saving Scheme) mutual funds.

5. Customizable & Flexible:

There are no penalties for pausing, increasing, or stopping SIPs at any time.

Step-by-Step Guide: How to Start SIP in Mutual Funds in India

Step 1: Set Your Investment Goal

Ask yourself:

• Are you saving for retirement?

• Planning for children’s education?

• Looking to buy a house in 10 years?

Setting a goal helps you choose the right mutual fund category — equity, debt, or hybrid.

Step 2: Choose the Right Mutual Fund Type

Here are some mutual fund types suitable for beginners:

• Equity Mutual Funds: Best for long-term wealth creation

• Debt Mutual Funds: Lower risk, good for short-term goals

• Hybrid Funds: Mix of equity and debt, moderate risk

• ELSS Funds: Offer tax benefits

Tip: Equity mutual funds through SIP are the best option for Gujarati investors with a longer time horizon and a greater risk tolerance.

Step 3: Select a Reliable SIP Investment Platform

You can invest through:

• Mutual Fund Houses (like HDFC MF, ICICI Prudential, etc.)

• Online platforms like Groww, Zerodha Coin, Paytm Money, ET Money

• Banks that offer SIP options

These platforms facilitate simple SIP management and provide a paperless KYC procedure.

Step 4: Complete Your eKYC

You must finish KYC (Know Your Customer) before you can begin investing. You will require:

• PAN card

• Aadhaar card

• Bank account details

Depending on the platform, a video or selfie for verification

Step 5: Choose SIP Amount and Date

• Start small; even ₹500 per month will suffice.

• Choose a date for the auto-debit, ideally shortly after your pay is credited.

Gujarati Tip: Because of compounding, even a small initial investment can yield significant returns. Karta paisa vadhaariye aapde vakhat!

Step 6: Monitor and Review Your SIPs Regularly

Once you’ve started your SIPs:

• Track performance every 6–12 months.

• Switch to better-performing funds if needed.

• Increase SIP amount annually as your income grows.

Best SIP Mutual Funds in India for Beginners (2025)

Here are some high-rated SIP options ideal for new investors:

Note: Results in the future are not guaranteed by past performance. If necessary, seek advice from an advisor registered with SEBI.

SIP vs Lump Sum: Which is Better?

For the majority of Gujarati investors seeking disciplined investing without the stress of market timing, SIPs are unquestionably superior.

Taxation on SIP Returns in India

1. Equity Funds:

        • Holding > 1 year: LTCG tax of 10% on gains above ₹1 lakh

        • Holding < 1 year: STCG tax of 15%

2. Debt Funds:

        • Taxed as per your income slab after indexation (if held > 3 years)

Section 80C provides a tax deduction of up to ₹1.5 lakh for ELSS mutual funds.

Frequently Asked Questions (FAQs)

Q1. Can I stop SIP anytime?

SIPs are adaptable, yes. Anytime you want, you can pause, stop, or alter the amount.

Q2. How long should I continue ?

Five to ten years or longer is ideal. The compounding effect improves with duration.

Q3. Which SIP is best for 5 years?

For medium-term objectives, take into account balanced advantage or hybrid funds.

Q4. Are SIPs safe?

Long-term volatility is decreased by SIPs in equity funds, but they still carry market risk. Debt funds yield steady returns and are safer.

Q5. Is SIP good for tax savings?

Yes, ELSS SIPs offer tax benefits under Section 80C.

Final Thoughts: Start Early, Stay Consistent

SIPs in mutual funds are a great way for Gujarati investors to begin their investing career. Just a little patience and discipline will do; you don't need lakhs of rupees or expert-level knowledge. Your chances of becoming financially independent increase with the time you start.

At 12% CAGR, a basic ₹1,000 SIP can grow to over ₹9.8 lakhs in 20 years!

Now is the time to start making your money work for you. Invest wisely, consistently, and, as we say in Gujarat, “vayaj ma paisa banavo!”