How much to keep in FD before starting equity SIP
Equity SIP is for money with time
If next month’s rent or a known fee still lives in your “investable” pool, an equity SIP will force a bad sale when life happens. Build three to six months of essential expenses in savings and short FDs first (more if income is irregular). Only the surplus after that buffer should feed equity instalments.
Size the buffer in months, not vibes
List monthly must-pays, multiply by your months target, and use the FD calculator if part of the buffer sits in deposits. Keep one month instantly available in savings. Starting a small SIP before the buffer is full is optional only when the SIP amount is tiny and the buffer plan is automatic on salary day.
Then start the SIP without raiding the FD
Once the buffer is funded, run the SIP calculator for long goals. Do not break the emergency FD to “buy the dip.” Replenish the buffer after every draw before you raise the SIP again.
Results from FinanceChacha are estimates for planning, not financial or tax advice. Read the disclaimer.
Try the calculators
Open a calculator this guide refers to and run your own numbers.