New Delhi, Sept. 9 -- Waiting until you can invest a larger amount can make starting feel like a decision for another year. An SIP offers a way to begin with a contribution that fits your finances today, then increase it as your income allows.

Starting early gives those first contributions more time to remain invested. Understanding compounding helps explain why that time matters, and why the amount you invest is only one part of building a fund for the future.

Compounding occurs when returns remain invested and become part of the amount on which subsequent returns are earned. Over time, growth can come from both the money you contributed and the growth already accumulated.

In mutual funds, this process is reflected in the changing val...