How to Start Investing With Little Money

When it comes to investing, many new investors believe that they need a lot of funds to get started. But the truth is that you can start investing with little money. All you need is the right strategy and discipline to slowly grow your money over the years. Alongside, you must ensure to invest earlier so that your money has enough time to grow. 

At the same time, finding the right investment options can be daunting for a beginner. So, to help you get started, here are different investment ideas with little money that will allow you to grow funds in the long term.

How Start Investing with Little Money?

Here are the different investment options you can consider when wondering how to invest money-

1. Mutual funds via SIPs

One of the best ways to invest money in equity or debt securities when you don’t have a large amount is Systematic Investment Plans (SIPs). With as little as ₹500 per month, you can invest in any mutual fund scheme.

For instance, if you want higher returns and don’t mind taking risks, equity funds are a good option. Or if you want consistent returns at a lower risk, debt funds are the way to go.

SIPs allow you to invest in a disciplined manner, reducing the risk of market fluctuations through rupee cost averaging.

2. Public provident fund (PPF)

For those looking for a safe, long-term investment with small amount, PPF is a great option. It is a government-backed scheme with a lock-in period of 15 years, but you can start with just ₹500 per year. PPF offers tax-free returns and is perfect for retirement planning.

Besides, the interest rate is determined by the government every quarter, which is usually higher than fixed deposits, making them an attractive investment option.

3. Stocks

Investing in stocks directly allows you to own shares of a company and benefit from its growth. With the right approach and thorough understanding of the stock market, equity investments carry a potential for high returns in the long run.

At the same time, it is a high-risk investment, so it is important to research and consider your risk appetite before investing.

4. Exchange-traded funds (ETFs)

ETFs are like mutual funds but trade on the stock exchange, just like stocks. You can start the investment with small amounts and invest in diversified portfolios, including stocks, gold, and bonds. They are low-cost and less risky than mutual funds, making them an excellent choice for beginners.

5. ULIP Funds

ULIPs are beginner-friendly investment ideas that offer the benefits of a life cover and investment growth, with a lock-in period of 5 years. A part of the premium paid within this plan goes towards life insurance, while the remaining is invested in a market-linked security of your choice, such as equity, debt, or index funds.

Plus, you can also claim a tax deduction on the premium paid towards the plan.

Conclusion

It does not matter if you have a small amount of money. All that matters is how early you invest in your chosen investment vehicle. 

Interested in making investments with little money in mutual funds? Visit Tata Capital’s Moneyfy website or download the app to explore and compare a wide range of mutual funds and start your investment journey.