Mutual Funds: Minimum Investment Amount

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Mutual Funds


Investing in mutual funds is quite a rage nowadays. You can easily invest in diversified options of equity, debt and hybrid funds in terms of your decision based on risk and return you want to achieve. The minimum amount for mutual fund investment can start as low as ₹100. Therefore, you can start with very small amounts and as your income grows, you can easily scale up your mutual fund investment size.

Popular ways to invest in mutual funds in India

There are three popular ways to invest in mutual funds in India:

New Fund Offers (NFOs)

  • NFOs are similar to IPOs in the stock market.
  • They collect fresh money from the general public for the first time.
  • NFOs can give you access to new funds and new ideas.
  • The minimum investment in an NFO is typically ₹5,000.

Lump-sum investment

  • Lump-sum investment is a one-time investment.
  • There are no upper limits on the amount you can invest in a lump sum.
  • The timing of the investment is important.
  • The minimum investment in a lump sum is ₹5,000.

Systematic Investment Plan (SIP)

  • SIP is the most popular method of investing in mutual funds.
  • It involves investing a fixed amount at regular intervals.
  • The minimum amount to start a SIP is ₹500 per deduction.
  • SIPs are a good way to invest for the long term.

Here are some additional tips for investing in mutual funds:

  • Do your research before you invest.
  • Choose a mutual fund that is right for your investment goals and risk tolerance.
  • Invest for the long term.
  • Rebalance your portfolio regularly.

Benefits of Investing in SIP

Easy on pockets

You can start investing through a minimum SIP amount of ₹500 per month or in case of certain schemes with ₹100 per month.

Inculcates discipline in investing

SIPs inculcate saving habits & discipline in investments by making you invest on a regular basis.

Averaging the cost of investment

SIPs allow you to invest a pre-specified amount in a scheme at periodic intervals. This helps to average out the cost of investment, as you will buy more units when the NAV is low and fewer units when the NAV is high.

Removes the need to time the market

With SIPs, you don't need to worry about timing the market. You can simply start investing and let the power of compounding work its magic.

Power of compounding over the long term

The longer you invest, the more time your money has to grow through the power of compounding. This is why SIPs are a great way to achieve long-term financial goals.

Here are some additional benefits of investing in SIPs:

  • Flexibility
    • You can choose the amount you want to invest and the frequency of your investments.
  • Tax benefits
    • You may be eligible for tax benefits on your SIP investments under Section 80C of the Income Tax Act.
  • Convenience
    • You can set up a SIP online or through a bank or financial advisor.

If you are looking for a disciplined and affordable way to invest for your long-term goals, then SIPs are a great option.

SIP funds starting with ₹100

Some funds are offering daily and weekly SIPs with much lower investment requirements. Similarly, the mutual fund industry has tapped into the rural sector by introducing micro-SIPs that have a very minimum amount for SIP. So, here is the list of six SIPs funds available having a lower risk with a min SIP amount of just ₹100.

S. No. Mutual FundsCategoryAUM (in ₹ crores)1Y Return3Y Return5Y Return
1.Nippon India Arbitrage Fund Direct GrowthHybrid Arbitrage2,77,915.134.6%4.7%5.7%
2.Axis Arbitrage Fund Direct GrowthHybrid Arbitrage2,61,160.434.7%4.7%5.5%
3.IDFC Arbitrage Fund Direct GrowthHybrid Arbitrage1,22,101.484.5%4.4%5.5%
4.HDFC Arbitrage Fund Wholesale Direct GrowthHybrid Arbitrage4,39,939.454.4%4.3%5.1%
5.Nippon India Overnight Fund Direct GrowthDebt Overnight2,77,915.134.6%3.8%NA
6.Invesco India Overnight Fund Direct GrowthDebt Overnight44,138.014.5%NANA


  1. There are 3 ways to invest in mutual funds in India: NFO, lump-sum, and SIP.
  2. The minimum investment amount is ₹5,000 for NFO, ₹5,000 for lump-sum, and ₹500 for SIP.
  3. Consider your goals, risk appetite, investment horizon, and budget before investing.
  4. Invest for the long term.
  5. Be clear on the minimum amount you can invest.
  • Can I invest 100 RS in mutual funds?

  • What is the 15x15x15 rule in mutual funds?

  • Can we start SIP with 500 RS?