PensionBox BlogsAll you need to know about Systematic Investment Plan

All you need to know about Systematic Investment Plan

05 Sep 20264 min read
Written By
Vanshika Agarwal
Vanshika Agarwal
PensionBox

Millenials and GenZ who comprise the job market love it, when their salaries are credited into their bank accounts. Similarly, nearing month ends and the days of poverty could be used inter-exchangeably. Another fun habit about this generation is that they love to party. Every weekend and most of the weekends. This fun habit has the ability to give you every joy, make new friends and also drain you out of your riches.

We at PensionBox, believe in our millenials with utmost pride but also, we care for them. In this blog we will talk about a habit that will definitely keep you fulfilled in your golden days too. Yes, we’re talking about investing, in the same old SIP way. It does sound boring but this is a sure short way to cultivate a habit for saving money and a stepping stone towards managing your finances. Investing in mutual funds through a Systematic Investment Plan (SIP) can be a simple way to help you achieve your goals. So, let’s look into the meaning of SIP, how they work, and how they can benefit you. If you are someone seriously contemplating why you are not able to save up anything from your salary, this blog is your rescue.

What is SIP?

A Systematic Investment Plan (or SIP) is an investment strategy best suited for Mutual funds. As the term indicates, it is a systematic method of investing fixed amounts of money periodically. This can be monthly, quarterly or semi-annually etc. When we invest into a product periodically, it becomes easier to achieve your goal.

How to develop this habit of SIP?

You must fix a certain percentage of your salary or a fixed amount that you want to invest into an SIP. Then, you need to decide the frequency of these investments. And, finally find a Mutual fund that helps you meet your financial goal and match your risk appetite. Then, the final step is to set aside this decided amount of money towards Investments as soon as your salary is credited. This will develop a habit of saving and we urge you to follow this as soon as possible. You could also give a standing instruction to your bank to transfer the amount directly from your bank account into the mutual fund SIP of your choice, on a fixed date every month

Why SIP?

When you invest through a SIP, you invest a fixed sum of money periodically. This amount lets you purchase a certain number of fund units. If you continue to do this for a long time, you get to invest in the fund during the highs and the lows. Here, you don’t have to time the market. SIP investments remove this factor of unpredictability.

Want to know how much your investments could grow with a SIP?

Try out this simple and effective SIP calculator to plan your goals.

When does one start investing in an SIP ?

In simple words, the earlier the better. Staying invested for a longer horizon helps you to accumulate more wealth. Compounding occurs when returns you earn on your investments start earning returns as well. When you invest regularly through SIPs, your returns get reinvested. Over time, this results in a snowball-effect that may increase your potential returns. In today’s age and date, it can be impossible to save. Given the rising Inflation and the low salaries, we might find ourselves in the position of regret later for not having saved enough. Hence, we need to plan ahead. For all we know that Old age is a bittersweet space, we cannot be sure what could follow.

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Frequently asked questions
PensionBox is India’s first pension platform/app that helps you access, invest in, and track your NPS and other pension products with better user experience & minimum charges.

PensionBox simplifies the National Pension System(NPS), the government's pension scheme for private employees both for retail users and HRs/companies.

If you don’t have an NPS account, you can simply open your pension account within 2 minutes and if you have NPS PRAN already, you will be able track, invest and manage everything free of charge with best user experience.
Absolutely. PensionBox is fully ISO 27001 compliant with the Pension Fund Regulatory and Development Authority (PFRDA), the government body that regulates pensions in India.

We never touch or hold your money directly, your investments go safely to your chosen pension fund through approved channels.

We are built with Zerodha as POP , ensuring transparency, data security, and peace of mind. Your retirement savings are protected by regulation and secured by technology.
Banks/POPs charges high fees on account opening & every investment Even CRA apps have hidden charges/low transparency & lack timely support Pension Funds restrict pension fund choice & selection to themselves.

That’s why, PensionBox brings transparency, zero charges, timely support and freedom to select any pension fund so that you get the best experience investing in NPS & be better future ready.

That’s not it, we help you & your company together to maximise contribution and tax savings with minimal charges & best user experience.
It’s super easy to use PensionBox, just start by signing up using your browser on laptop/mobile or downloading the app on appstore or playstore.

If you are an existing zerodha user then you get a fast login or sign up using kite ID.

Once you are onboarded with kite ID, you get free access to
  • Open NPS in 2 minutes
  • Track existing NPS
  • POP shift or CRA shifting
  • Invest in one time or create SIP in NPS
  • Withdraw NPS requests & instant withdraw tier 2
  • Create your dream retirement plan
  • Open NPS Vatsalya for your kid
  • Share with HR (To unlock more tax benefits)
Tax Benefits in New Tax Regime
  • Employer Contribution:
    • Contributions made by your employer to your NPS account are tax-free up to 14% of your basic salary under Section 80CCD(2). Do connect us with your HR to enable this for you.
    Tax Benefits in Old Tax Regime
  • Self-Contribution:
    • Deduction up to ₹1.5 lakh under Section 80C.
    • Additional deduction of ₹50,000 under Section 80CCD(1B) — exclusive to NPS investments!
    • This allows you to claim a total deduction of up to ₹2 lakh every year on your NPS contributions.
  • Employer Contribution:
    • Contributions made by your employer to your NPS account are tax-free up to 10% of your basic salary (Basic + DA) under Section 80CCD(2). Do connect us with your HR to enable this for you.
    • This is over and above your personal deduction limits, giving you extra tax efficiency.
We understand NPS can be confusing, complex and there is a lot of information out there to believe in. Don’t worry, our team is here to help you with the right information.

Feel free to book a free call to learn more about NPS, NPS Vatsalya, Corporate NPS & PensionBox or contact the support team.
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