InvestmentFinancial Glossary
SIP (Systematic Investment Plan)
Definition
A method of investing a fixed amount in a mutual fund at regular intervals (usually monthly). SIP automates investing through bank standing instructions and provides rupee cost averaging — buying more units when prices are low and fewer when prices are high.
Why It Matters
SIP removes the need to time the market and builds investing discipline. Historical data shows that a Rs 10,000 monthly SIP in a Nifty 50 index fund over 15 years (2009-2024) would have turned total investment of Rs 18 lakh into approximately Rs 50 lakh. The power lies in consistency and compounding.