22 April 2024
How Much SIP Should You Do Based on Your Salary? (India Guide)
The most common question from new investors: "How much SIP is right for me?"
The answer follows one simple rule: invest 20% of your take-home salary.
The 50-30-20 Rule for Indians
| Bucket | % of Take-home | Purpose |
|---|---|---|
| Needs | 50% | Rent, EMI, groceries, bills |
| Wants | 30% | Dining, entertainment, travel |
| Investments | 20% | SIP, PPF, emergency fund |
SIP Amount by Salary Level
₹25,000/month Take-home
- SIP: ₹5,000/month
- At 12% CAGR for 15 years: ₹25.2 lakh
- "I can't afford to invest" is a myth. Even ₹500/month compounds significantly.
₹50,000/month Take-home
- SIP: ₹10,000/month
- At 12% CAGR for 15 years: ₹50.4 lakh
- At 20 years: ₹98.9 lakh — close to ₹1 Cr!
₹1,00,000/month Take-home
- SIP: ₹20,000/month
- At 12% CAGR for 20 years: ₹1.97 Cr
- Split: ₹10K equity large-cap + ₹5K mid-cap + ₹5K ELSS (tax saving)
₹2,00,000/month Take-home
- SIP: ₹40,000–₹60,000/month
- At 12% CAGR for 20 years: ₹4–6 Cr
- Add step-up SIP: increase by 10% each year → corpus can reach ₹8 Cr+
The Power of Starting Early
| Start Age | Monthly SIP | Corpus at 60 | Total Invested |
|---|---|---|---|
| 25 | ₹5,000 | ₹1.76 Cr | ₹21L |
| 35 | ₹5,000 | ₹49.9L | ₹15L |
| 45 | ₹5,000 | ₹11.6L | ₹9L |
Starting at 25 vs 35 gives 3.5x more corpus for the same monthly investment.
Step-Up SIP — The Wealth Multiplier
Every year, increase your SIP by 10%:
- Year 1: ₹10,000/month
- Year 5: ₹14,641/month
- Year 10: ₹23,579/month
A step-up SIP of ₹10,000 at 12% CAGR for 20 years with 10% annual step-up creates a corpus of ₹3.65 Cr vs ₹98.9 lakh flat SIP.
Use our SIP Calculator to model your exact scenario.