What is a SIP?
A plain-language explainer of systematic investment plans, how they work and why people use them.
The basics
A systematic investment plan, or SIP, is a way to invest a fixed amount at regular intervals, usually monthly, into a mutual fund. It turns investing into a steady habit rather than a one-off decision.
Rupee or dollar cost averaging
Because you invest the same amount each period, you buy more units when prices are low and fewer when prices are high. Over time this can smooth out your average purchase price.
The power of compounding
Returns earned on your investment also start earning returns. Over long periods this compounding effect can make a meaningful difference to the final value.