As appraisal season brings salary hikes for most employees between April and June, financial planners say this is the right time to reassess savings and strengthen investment strategies—especially through mutual funds.
How can employees save more in mutual funds after a salary hike ?
Salaried employees typically follow a fixed monthly budgeting pattern, setting aside a portion of their income for savings after meeting household expenses.
According to an ET analysis, many prefer mutual funds as a route to grow their wealth over time, often opting for systematic investment plans (SIPs). These regular monthly investments help build a corpus for long-term goals like buying a home, funding children’s education, or retirement. For instance, someone earning Rs 1 lakh a month might invest Rs 25,000 via SIPs.
Why salary hikes are a good opportunity to reassess SIPs
Most employees receive an annual increment, generally effective from April onward. Financial planners advise that instead of allowing lifestyle inflation to consume the entire raise, a portion should be redirected into savings—particularly SIPs. This helps combat rising inflation and ensures that financial goals stay within reach.