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What is a SIP (systematic investment plan)?
Quick answer
A SIP, or systematic investment plan, is a way to invest a fixed amount in a mutual fund automatically every month instead of all at once. It builds the habit of investing, averages out market ups and downs, and turns small regular amounts into a large corpus over time.
Key things to understand
- Invest a fixed amount monthly, automatically.
- Spreads buying across market highs and lows.
- Turns small regular sums into long-term wealth.
- Powered by compounding over many years.
People also ask
How is a SIP different from a lump sum?
A SIP invests gradually each month, averaging your cost; a lump sum puts everything in at once, exposing you more to timing.
Can I start a SIP with a small amount?
Yes — many mutual funds allow SIPs from as little as ₹100–₹500 per month.
What is rupee-cost averaging?
Investing a fixed sum regularly buys more units when prices are low and fewer when high — smoothing your average cost.
Part of the guide: Money Basics: Save, Borrow & Invest →