New Delhi. Mutual fund investments in India have seen a huge increase in the last few years. To further promote this interest, companies have reduced the minimum amount to start a Systematic Investment Plan (SIP) to just Rs 100. Recently, LIC Mutual Fund Asset Management Company (AMC) has reduced the minimum amount of daily SIP to Rs 100. Now investors can start SIP with Rs 100 in select schemes of LIC Mutual Fund and increase the investment in multiples of Rs 1. Also, LIC MF has also added the option of daily SIP in its liquid fund, which will give people more opportunities to grow their money over time.

From an investment perspective, a SIP of Rs 100 is a very small amount. Let us find out how beneficial a SIP investment of just Rs 100 is in today's times.

New investors will benefit from a lower SIP amount.
Lower SIP amount encourages small investors, especially first-time investors, to enter the financial market. Many people from rural or low-income groups hesitate to invest a large amount. Reducing the minimum SIP amount is in line with the government's 'Jan Dhan Yojana' and other financial inclusion programs.

The opportunity to start investing with a small amount makes it easier for people of different income groups, such as students and youth, to start investing. If a small amount is invested regularly, it can yield good returns in the long term through the power of compound interest. Apart from this, by investing a small amount, new and cautious investors are less worried about potential losses during market downturns.

This change is expected to promote disciplined investing. The purpose of starting SIP from Rs 100 is to encourage consistent and long-term investment. For new investors, this small amount allows them to enter the market without feeling the pressure of making a large investment.

Better returns in the long term
By reducing the minimum SIP amount to Rs 100, fund houses are ensuring that mutual funds are not just for high-net-worth investors but also for people of all income groups. Mutual funds have established themselves as an essential tool for goal-based investing, helping people achieve their financial goals. Due to compounding, investing in mutual funds gives better returns in the long term.