Securities and Exchange Board of India has suggested a new way to help employees save and invest. The idea is called payroll linked systematic investment plan. Under this system, a small part of the salary will be directly invested in mutual funds every month. It will work just like deductions for provident fund or pension contributions.
Systematic investment plans are already popular in India. In the last financial year, contributions through SIPs crossed three and a half trillion rupees, showing strong growth. Assets managed through SIPs also touched more than sixteen trillion rupees. This shows that many retail investors trust SIPs for steady wealth creation.
The payroll linked model will make saving even simpler. Employers of listed companies and those registered with the provident fund office can offer this facility. Employees will have to give consent and they can choose the mutual fund schemes they prefer.
This approach ensures that saving happens before spending. It reduces the chance of missing contributions and builds discipline. By linking investments with salaries, SEBI wants to encourage long term wealth building among working Indians. For employees, it is a professional and structured way to grow money while focusing on their careers.