Here’s how you can start investing even with little money

Updated: Sep 14, 2021

Accumulating wealth for your retirement or saving up money to travel the world is not an expensive affair. Investing even small amounts of money at regular intervals can help you achieve your financial goal. Here are a few tips that can assist you.


It is a common misconception that one needs a great deal of money in order to invest in financial instruments. This in turn discourages people from starting early and expanding their wealth. Well, the bright side is that you can begin with as little as Rs 100 to 500 and still multiply the money.

But, before you kick off this journey, it is important to get the fundamentals right. This includes laying down financial goals, assessing risk tolerance, arriving at an investment horizon and getting a grasp on how the market functions.

Next, you can work on creating a budget, after factoring in monthly expenditures. Putting in some effort to read and research investment options as well as potential stocks is also imperative at this juncture.

Picking the right stocks is similar to harvesting fruits from a large garden. You need to dig into the performance and financials of companies before investing in them, just like how you scrutinise the texture and ripeness of the produce while gathering the produce.

Some ways to pool in funds for investment

In order to keep aside money for investments, you might have to reorganise your budget and think about how you can cut down on some expenses. Once this is done, you can redirect the savings into various investment channels. Pivoting bonuses or raises from your job as well as your tax returns into investments is also a good option.

Subsequent to this, you can automate payments towards equity, mutual fund or post office savings schemes.

Image credit: Jcomp, Freepik

In the beginning, it might be a little hard to diversify investments, especially with small sums of money. To overcome this, you can consider putting together a corpus of seed amount.

Options at your disposal

  1. Equity: Investing in equity or stocks is one of the best ways to accumulate wealth in the long term. It provides an average of 12.5 percent return every year. You can either do this through a broker or by yourself through apps like Zerodha, Groww, etc. However, you need a demat account to store your positions electronically. Before initiating a purchase or sale, you need to do some homework to find out about the company’s products, business model, competitive advantage as well as financial performance. After investing, it is crucial to review your returns and revisit them on a regular basis.

  2. Post office scheme: Post office schemes generally offer low returns and allow you to invest money in small amounts. Opening a post office savings account requires just Rs 20 and offers about 4 percent interest per annum.

  3. Systematic investment plans: A systematic investment plan is a facility offered by mutual funds for you to invest in a disciplined manner. It allows you to invest a fixed amount of money at predefined intervals in a selected scheme. The returns on this kind of investment depends both on the performance of the fund and its assets. Even if you consider a modest 10 percent annual return, investing just Rs 1,000 a month when you are 22 years old can fetch you Rs 18,30,595 by the time you turn 60.

  4. Fixed deposits: Fixed deposits are traditional fixed income investments provided by banks. Most banks offer a similar rate of interest on FDs, which is anywhere between 6.5 to 7.25 percent. At the end of the period, you can get your original capital as well as the interest. Many people even reinvest this money in other avenues. Considered as safe, low-risk investments, FDs can be started with amounts as low as Rs 100 to 500.


Edited by Roshni Shroff


Some resources to help you learn more about investing with little money:

  1. Stock Market Guide for Beginners: How to Invest in Stocks - India Infoline

  2. Equity investing: Basic rules of investing in the stock market