# What is micro-investing, and how does it work in India?

Source: https://koshex.com/blog/what-is-micro-investing · Published 20 June 2023 · 6 min read

Micro-investing means investing small amounts regularly, usually automatically, instead of waiting to save a large sum. In India the common form is a SIP of as little as ₹100 a month in a mutual fund. The small amount does not make it safer, because the risk is that of whatever you buy.

## Key takeaways

- Micro-investing means putting small amounts to work regularly, so investing becomes a habit rather than one big decision.
- In India the usual form is a SIP, and many schemes accept one from ₹100 a month.
- At an assumed 10% a year, ₹500 a month for 20 years grows to ₹3,82,848 on ₹1,20,000 put in. That is an assumption, not a forecast.
- A small amount does not lower the risk, because the riskometer belongs to the fund and not to the size of your SIP.
- A flat fee takes a bigger share of a small deposit, and a fund's expense ratio is a percentage of its assets.

Micro-investing means putting small amounts of money to work regularly, usually on autopilot, instead of waiting until you have a large sum. In India the common form is a SIP of as little as ₹100 a month in a mutual fund. A SIP is a fixed amount invested at regular intervals. A mutual fund is a pool of money from many people, invested by a professional manager. A small amount does not make an investment safer. The risk belongs to whatever you buy, not to the size of your cheque.

## What is micro-investing?

Micro-investing is the habit of investing small sums again and again to build up a holding over time. FINRA is a US self-regulatory body for brokers. It defines micro-investing as "the process of regularly investing small amounts of money to build up a stake over time while participating in financial markets."

Think of a piggy bank that, instead of sitting in a cupboard, buys something that can grow. The sums are small. The point is that you start, and keep going.

## How does micro-investing work?

A fixed small amount moves from your bank account to an investment on a schedule you set once. After that you do not have to decide each month.

Some apps abroad add a second model called round-ups. FINRA says some US apps round up your debit or credit card purchases and send the spare change into your investment account. That is US practice, not a description of an Indian product.

In a mutual fund, each instalment buys units at that day's NAV, the price of one unit of the fund. When the NAV is lower, the same amount buys more units. When it is higher, it buys fewer. The [SIP guide](https://koshex.com/blog/systematic-investment-plan-sip) walks through the mechanics.

## Can you micro-invest in India?

Yes, mainly through a SIP. There is no SEBI floor on how little you can invest; the minimum is each scheme's own, written in its scheme documents. Many schemes accept a SIP from ₹100 a month, though others ask for more.

One fund house's scheme document of November 2025 shows a daily SIP from ₹100. Its monthly SIP starts at ₹200. These amounts may have changed since. They only show that minimums differ from fund to fund.

The Koshex app takes a SIP or a one-time investment from ₹100. Browse the funds on the [mutual funds page](https://koshex.com/mutual-funds). Even a small SIP needs KYC, the know-your-customer identity check. The [KYC guide](https://koshex.com/blog/mutual-fund-kyc) has more.

Digital gold is another way to start small. You buy gold online from ₹100 in the Koshex app, can sell it at any time and can take physical delivery. Digital gold is not regulated by SEBI. In November 2025 SEBI said such products are "neither notified as securities nor regulated as commodity derivatives" and that its investor-protection mechanisms do not apply to them. Gold ETFs and gold mutual funds are SEBI-regulated. The [digital gold page](https://koshex.com/digital-gold) and the [digital gold guide](https://koshex.com/blog/digital-gold-investment) have the detail.

Small amounts also reach the share market. You can buy one unit of an [ETF](https://koshex.com/blog/exchange-traded-funds), a fund whose units trade on the exchange, if you have a demat account, which holds them electronically, and a trading account. A [REIT's](https://koshex.com/blog/real-estate-investment-trust-reit-in-india-all-you-should-know-about) units also trade in lots of one.

## Is micro-investing worth it?

It can build a real sum over many years, but small amounts grow into modest ones. The figures below come from the SIP calculator and assume a return of 10% a year. That is an assumption, not a forecast. It sits below AMFI's equity illustration rates of 12.42%–12.80%, the mean of 10-year rolling returns from 1 June 2014 to 31 May 2024. Past performance may or may not be sustained in future.

| Monthly SIP | Years | You put in | Value at an assumed 10% a year |
| --- | --- | --- | --- |
| ₹100 | 10 | ₹12,000 | ₹20,655 |
| ₹500 | 10 | ₹60,000 | ₹1,03,276 |
| ₹500 | 20 | ₹1,20,000 | ₹3,82,848 |

Actual returns may differ, and the fund value can also fall. Try your own numbers on the [SIP calculator](https://koshex.com/calculators/sip-calculator).

The bigger gain is the habit. Raising the amount later matters too, and a [step-up SIP](https://koshex.com/blog/step-up-sip) does that on a set schedule. If you are weighing a specific amount, the [₹1,000 guide](https://koshex.com/blog/9-best-ways-to-invest-rs-1000) looks at that question.

## What are the risks and costs of micro-investing?

The risk is the investment's own, and fixed fees hurt most when the amount is small.

A mutual fund's value can go up or down as the prices of what it holds move. SEBI makes every fund carry a riskometer, a label with six levels from Low to Very High. That label belongs to the fund, not to your SIP. In Koshex's fund list on 29 September 2026, every listed large cap fund read Very High, while most listed liquid funds read Low to Moderate. A ₹100 SIP into a Very High fund is still an investment in a Very High risk fund.

Digital gold carries its own risks. SEBI says such products "may entail significant risks for investors and may expose investors to counterparty and operational risks". The [digital gold guide](https://koshex.com/blog/digital-gold-investment) explains them.

Fees work differently. FINRA warns that "even a nominal monthly fee can have a big impact on your returns for a small account." A made-up example: a flat ₹50 a month on a ₹500 monthly deposit is 10% of the money you put in. On ₹5,000 a month the same ₹50 is 1%. Check what any app charges before you start.

A fund's own cost, the expense ratio, is different. It is a yearly fee shown as a percentage of the fund's assets and taken out of the NAV each day. A ₹100 SIP pays the same percentage as a ₹1 lakh one, with no separate fee from the fund for each instalment. The [expense ratio guide](https://koshex.com/blog/what-is-expense-ratio-and-why-is-it-important) explains it.

Koshex charges investors no platform or transaction fee. Fund costs such as the expense ratio and exit load belong to the scheme, not to Koshex. An exit load is a fee some funds charge if you sell within a set time after buying.

FINRA also notes that app design "might encourage investment choices based on emotion". It adds that "fear of missing out (FOMO) can have a negative impact on your performance." The [behavioural biases article](https://koshex.com/blog/common-behavioural-biases-investors-must-avoid) looks at this. If you are new to all of it, the [beginner's guide](https://koshex.com/blog/how-to-start-investing-a-beginners-guide) is a good place to begin.

## Frequently asked questions

### What is micro-investing?

Micro-investing means investing small amounts regularly, usually automatically, instead of waiting to save a large sum. FINRA, a US self-regulatory body, describes it as regularly investing small amounts to build a stake over time. In India the common form is a SIP of as little as ₹100 a month.

### Is micro-investing safe?

The size of the amount does not decide the risk. The investment does. A mutual fund's value can go up or down as the prices of what it holds change. A small SIP into a fund whose riskometer reads Very High is still a Very High risk investment.

### Is a SIP a form of micro-investing?

Yes, when the amount is small and regular. A SIP is a fixed amount invested at set intervals, and many schemes accept one from ₹100 a month. A SIP of a larger amount is still a SIP, but it is no longer micro.

### Can I invest a small amount every day or by UPI?

Some schemes offer daily SIPs. One fund house's document from November 2025 shows a daily SIP from ₹100, and that amount may have changed since. Fund houses accept UPI (Unified Payments Interface) payments, net banking and bank transfers from your own account. KYC, the know-your-customer identity check, is needed first even for a small SIP.

### How can I invest a small amount in gold?

At Koshex you can buy digital gold from ₹100, sell at any time and take physical delivery. Digital gold is not regulated by SEBI. In November 2025 SEBI said such products are neither notified as securities nor regulated as commodity derivatives, and that its investor-protection mechanisms do not apply to them. Gold ETFs and gold mutual funds are SEBI-regulated.

### Can I invest a small amount in the share market?

Yes, one at a time. You can buy a single share, or a single unit of an ETF, a fund whose units trade on the exchange. You need a demat account, which holds them electronically, and a trading account with a stockbroker. Your broker's charges apply. A REIT's units also trade in lots of one.

### Is there tax on small investment gains?

For equity-oriented fund units, which hold at least 65% in Indian listed shares, gains on units held 12 months or less are taxed at 20%. Units held more than 12 months are long-term, and those gains are taxed at 12.5% only on the part above ₹1,25,000 in a tax year. So long-term gains on these units within ₹1,25,000 in a tax year carry no tax under the Income-tax Act 2025. That ₹1,25,000 is one allowance for you for the whole tax year, covering all your equity funds and any shares you sell, not each fund. Both rates apply only when securities transaction tax, a very small tax deducted when you redeem, has been paid on the sale. No TDS (tax deducted at source) is taken when a resident redeems.

### What is the minimum SIP amount in India?

SEBI sets no minimum of its own. The floor is the scheme's, stated in its scheme documents. Many schemes accept a SIP from ₹100 a month and others ask for more, so check the scheme you pick.

*This article explains how things work; it is not advice to buy or sell any investment. Mutual fund investments are subject to market risks, read all scheme related documents carefully.*