What is the Right Age to Start Investing in Mutual Funds?

THE TEEN WHO OUTSMARTED TIME

When Rohan turned 22, he had two big dreams:

• Travel the World
• Retire comfortably by 55

But unlike many of his peers who spent every paycheck on gadgets and weekends out, Rohan made one choice that changed his life: he started investing in mutual funds. 

This isn’t just Rohan’s story. It’s a story about millions of young Indians learning about money early, and how starting early can turn small habits into life-changing outcomes.

CHAPTER 1: THE BIRTHDAY GIFT THAT SPARKED A HABIT

On his 22nd birthday, Rohan’s father handed him a small but thoughtful present, a mutual fund SIP account statement showing Rs 1000 invested every month for one year. 

“Why Mutual Funds?” Rohan asked.
His father smiled, “Because time and discipline matter far more than big amounts. You are young, that’s your biggest asset.”

That night, Rohan googled “best age to start SIP” and quickly came across a trend: many financial distributors say the best time to begin mutual fund investments is as soon as you start earning. And for most people, that means early 20s, even as early as 18.

CHAPTER 2: THE POWER OF TIME-THE FIRST LESSON

Rohan’s friend Meera began investing at 25. Rohan invested Rs 5000 per month in equity mutual fund SIPs at 22. Looking at their projections:

Source: NJ Calculator

These figures, based on consistent returns averaging ~12.62%* over long periods, showed Rohan how starting earlier made a big difference. The same amount, when invested early, grew significantly more thanks to compound interest.

Rohan realized that finding the right age to start investing wasn’t about magic numbers; it was about making time work for you.

*Assuming investment in Equity Funds and an average return of 12.62% p.a. as per AMFI Best Practice Guidelines Circular No. 135/BP/109-A/2023-24 dated September 10, 2024. Past performance may or may not be sustained in future and is not a guarantee of any future returns.

CHAPTER 3: THE REAL-LIFE STATS THAT HIT HOME

Rohan kept reading. Here’s what he learned:

1. Young Investors in Mutual Funds (Age 18-30)

Nearly 48% of mutual fund investors in India are between 18 and 30 years old, indicating strong youth participation in mutual fund investing.

Source: Economic Times
https://economictimes.indiatimes.com/mf/mf-news/half-of-mutual-fund-investor-base-is-in-age-bracket-of-18-to-30-years-report/articleshow/123237188.cms  (August 11, 2025)

2. SIP Account & Monthly SIP Inflows

Active SIP accounts (~9.4 crore contributing SIPs) and monthly SIP inflows, consistently around Rs 29,445 crore, are reported by AMFI data.
https://www.amfiindia.com/articles/mutual-fund

3. Mutual Fund Industry AUM Growth

The total Assets Under Management (AUM) of the Indian mutual fund industry has grown significantly over the past decade. AUM reached close to Rs 82 lakh crore by December 2025, according to AMFI’s published figures.
https://www.amfiindia.com/articles/indian-mutual 

These numbers weren’t just statistics; they were proof that millions like him are choosing the SIP path early, making the right age to start investing in mutual funds a reality, not just an aspiration.

CHAPTER 4: WHEN FRIENDS QUESTIONED HIM

At a cafe, Rohan’s friend Siddharth asked, “Why not just keep money in savings? SIPs seem risky.”

Rohan explained:

• SIP investments spread risk over time.
• Monthly small amounts reduce volatility impact.
• Equity SIPs historically beat inflation over the long term.

He pointed out that while bank savings feel safer, equity mutual funds have outperformed inflation over decades*, making them powerful for long-term financial needs like retirement.

*Past performance may or may not be sustained in future and is not a guarantee of any future returns.

His friend was intrigued, especially when Rohan showed how even modest SIPs could grow impressively with patience and discipline.

CHAPTER 5: TURNING POINT: MIX OF DISCIPLINE AND TIME

Twenty years later, Rohan (age 42) checked his Mutual Fund Portfolio.
Thanks to starting early:

• His SIP corpus had grown impressively.
• He had a diversified basket of equity, hybrid, and debt mutual funds
• He had already become financially independent.

Meanwhile, Meera, who started at 25, still grew her wealth but needed larger monthly SIPs later on to catch up to Rohan’s corpus.

This illustrates that the best age to start SIP isn’t a fixed number; it’s as soon as you financially can, especially when young. What matters most is:
Consistent contributions + more years in the market = better outcomes

CHAPTER 6: LESSONS ROHAN WISHES EVERYONE KNEW

From his financial journey, Rohan created a simpler rule:
Best age to start SIP:

• Early 20s: Ideal, maximum compounding effect
• Late 20s & 30s: Reasonable time, accelerate SIP amounts
• 40s & 50s: Focus on objective-based investing, risk control

“ Every year you delay investing,” Rohan tells new investors, “ you lose the power of compounding, the true driver behind mutual fund growth.”

CONCLUSION: TIME IS THE REAL ASSET

Rohan’s story is not rare. In India’s new investing era:

• Young adults are increasingly choosing SIP.
• Mutual Funds are mainstream wealth builders
• Statistical backing proves that early starts compound better.

So ask yourself:
Why wait? What’s stopping you from starting your first SIP today?
Because the right age to start investing isn’t tomorrow, it’s now. 

Disclaimer: Mutual Fund investment are subject to market risk, read all scheme related documents carefully.