What Is a SIP (Systematic Investment Plan)?

A SIP — Systematic Investment Plan — is a way of investing a fixed amount into a mutual fund at regular intervals (usually monthly), rather than a lump sum. It's the most popular way Indians invest in mutual funds.

How a SIP works

You set an amount (say ₹5,000) and a date, and that amount is automatically invested into your chosen fund each month, buying units at whatever the NAV is that day. Over time you accumulate units across many different price points.

Rupee-cost averaging

Because you invest a fixed rupee amount regardless of price, you automatically buy more units when the NAV is low and fewer when it's high — averaging out your cost and removing the need to time the market. This is called rupee-cost averaging.

The power of discipline and compounding

A SIP enforces regular investing and lets returns compound over years. Steady SIP inflows are also a major reason DII money has grown into a stabilising force in the Indian market. SIPs typically invest in mutual funds.