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What is SIP?

Systematic Investment Plan (SIP) is a facility offered by mutual fund schemes to facilitate investors in investing a specified amount in a disciplined manner. Since, it is very difficult for the investors to time the market and invest accordingly into mutual funds, SIPs prove to be more favorable strategy in approaching investments and seek the benefit of Rupee Cost Averaging (i.e. more units are purchased when NAV falls and fewer units are purchased when NAV increases). The minimum amount to be invested through SIP can be as low as Rs.100 and the frequency of investment is usually daily, weekly, fortnightly, monthly or quarterly. Investing in mutual funds for long term can facilitate investor in availing benefits of Power of Compounding.

To cater to needs of investors, mutual funds have launched different types of SIPs like Any Day SIP, Top up SIP, SIP pause etc.