What Is SIP? Complete Guide to Systematic Investment Plans
SIP (Systematic Investment Plan) is a method of investing a fixed amount in mutual funds at regular intervals — typically monthly. It's one of the most popular and disciplined ways to build wealth.
How SIP Works
When you set up a SIP, a fixed amount is automatically debited from your bank account and invested in your chosen mutual fund on a set date each month. You get units based on the current NAV. Over time, you accumulate units at various prices.
Benefits of SIP
1) Rupee Cost Averaging: Buy more units when prices are low, fewer when high. 2) Power of Compounding: Small regular investments grow exponentially. 3) Disciplined Investing: Automates your investment habit. 4) Flexibility: Start with ₹500, increase/pause anytime. 5) No market timing needed.
Types of SIP
Regular SIP: Fixed amount every month. Step-up SIP: Amount increases annually by a set percentage. Flexible SIP: Vary amount based on market conditions. Perpetual SIP: No end date, continues until you stop.
Getting Started
1) Complete KYC (PAN + Aadhaar). 2) Choose a mutual fund based on your goal and risk appetite. 3) Set SIP amount and date. 4) Set up auto-debit from your bank. 5) Review annually but don't stop during market dips!