A Systematic Investment Plan (SIP) is a disciplined way to invest in mutual funds by contributing a fixed amount at regular intervals, such as monthly or quarterly. It helps investors build wealth over time while minimizing the impact of market fluctuations.
Key Features
Rupee Cost Averaging: Invests across market ups and downs, reducing the risk of timing the market.
Power of Compounding: Returns are reinvested, accelerating wealth creation over time.
Affordability: SIPs can start with as little as ₹500 per month.
Flexibility: Investors can adjust the investment amount and frequency.
Convenience: Automated deductions from a bank account make investing hassle-free.
How SIP Works
Choose a Mutual Fund: Select a fund based on financial goals and risk tolerance.
Set the SIP Amount: Decide how much to invest regularly.
Select the Frequency: Choose monthly, quarterly, or other intervals.
Automated Deductions: The amount is deducted from the bank account and invested at the prevailing Net Asset Value (NAV).
Units Allocation: The investment amount is converted into mutual fund units.