Mutual Fund Minimum Investment in India: Start From ₹100

What Is Mutual Fund Minimum Investment?

The minimum investment for mutual funds is the least amount of money that an investor should pay to buy units in a mutual fund scheme. The least amount required for making investments is determined by the respective AMC and can vary according to schemes.

Depending upon the schemes, the investors can either choose a systematic investment plan or take a lump sum investment. While many SIP plans begin at ₹100 or ₹500, the minimum lump sum investment varies.
 

Examples of Mutual Fund Minimum Investments in India

The minimum investment amount varies across mutual fund schemes and fund houses. The table below provides a general comparison.

*The minimum investment amount differs across mutual fund schemes and Asset Management Companies.

Minimum Investment by Mutual Fund Type

Different categories of mutual funds may have different minimum investment requirements.

*Actual investment limits depend on the respective mutual fund scheme.

Minimum SIP Amount for Mutual Funds

A Systematic Investment Plan SIP allows investors to invest a fixed amount at regular intervals instead of investing a large amount at one time.

Many fund houses offer a minimum SIP amount of ₹100 or ₹500, although the exact amount depends on the scheme.

Micro-SIP

Some mutual fund schemes offer Micro-SIPs, allowing eligible investors to begin investing with a small monthly contribution. This option is designed for investors who wish to start with a limited investment amount.

Rupee Cost Averaging

With SIP investing, the same amount is invested at regular intervals regardless of market conditions. When prices are lower, more units are purchased, while fewer units are allotted when prices are higher. This process is known as rupee cost averaging.

Example:

Suppose you invest ₹500 every month through a SIP.

• Month 1: NAV = ₹20 → Units allotted = 25
• Month 2: NAV = ₹25 → Units allotted = 20
• Month 3: NAV = ₹16 → Units allotted = 31.25

Over time, the average purchase cost may differ from investing the entire amount on a single date.
 

Minimum Lump Sum Investment in Mutual Funds

A lump sum investment involves investing the entire amount in one transaction instead of making periodic investments through an SIP.

The minimum lump sum investment requirement varies across mutual fund schemes. Some schemes accept investments from ₹100, while others may require ₹500, ₹1,000, or ₹5,000 as the initial investment.

A lump sum investment may be suitable for investors who already have the amount available and prefer to invest it at one time. The investment approach should be selected based on individual financial goals and investment preferences.
 

SIP vs Lump Sum: Minimum Investment Comparison

Both SIP and lump sum investments allow investors to invest in mutual funds, but they differ in the investment method and minimum amount required.

Factors Affecting Minimum Investment in Mutual Funds

The minimum amount to invest in mutual funds may differ from one scheme to another. Some of the factors that influence the investment amount include:

• Asset Management Company (AMC) Policy: Each AMC decides the minimum investment amount for its mutual fund schemes.
• Type of Mutual Fund Scheme: Equity, debt, hybrid, ELSS, and liquid funds may have different minimum investment requirements.
• Investment Mode: The minimum amount for a Systematic Investment Plan (SIP) may differ from the amount required for a lump sum investment.
• Investment Objective: Certain schemes may have different investment limits depending on their objectives and structure.
• Investor Category: In some cases, investment requirements may vary based on the investor category or the specific scheme offered.
   

Benefits of Starting With a Small Investment

Beginning with a smaller investment amount allows investors to enter mutual funds without committing a large amount at once.

Some benefits include:

• Makes Investing More Accessible: Many mutual fund schemes allow investors to start with a relatively small investment amount.
• Supports Long-Term Compounding: Regular investments over a longer period allow returns to remain invested, contributing to the compounding process.
• Encourages Investment Discipline: Investing through an SIP helps investors contribute regularly according to their financial plan.
• Reduces the Need for a Large Initial Investment: Investors can begin investing without waiting to accumulate a substantial amount.
• Provides Market Participation: Even small investments allow investors to participate in mutual fund schemes and build investment experience over time.
   

How to Start Investing With a Minimum Amount

Starting a mutual fund investment involves a few simple steps.

1. Choose a Mutual Fund: Select a scheme that matches your financial goals and investment horizon.

2. Complete the KYC Process: Submit the required KYC documents through an authorised platform or intermediary.

3. Open Your Investment Account: Create a mutual fund investment account with the selected platform.

4. Select the Investment Mode: Choose between a SIP investment or a lump sum investment.

5. Decide the Investment Amount: Enter the minimum investment amount accepted by the selected mutual fund scheme.

6. Complete the Transaction: Confirm the investment and make the payment through the available payment options.
 

Conclusion

The lowest investment amount for mutual funds is subject to the type of scheme chosen by the investor, mode of investment, and asset management company. The minimum investment amount can be ₹100 or ₹500 for many mutual fund schemes in the case of SIP, while the minimum investment amount varies among schemes in the case of lump sum. It is advised to go through all the information before making the choice of investment.