What Is SIP (Systematic Investment Plan)?

SIP (Systematic Investment Plan) is a way of investing a fixed amount into a mutual fund at regular intervals — usually monthly — instead of investing a large sum all at once (a lumpsum).

How It Works

Instead of trying to time the market with a single big investment, you commit to investing a fixed amount (say ₹5,000) every month. Over time, this:

• Averages out market ups and downs — you buy more units when prices are low and fewer when prices are high, smoothing out volatility.
• Builds a habit — automated monthly investing removes the need to decide “when” to invest.
• Compounds over time — returns generated also start earning returns, which is why SIPs are usually discussed in terms of long time horizons (5, 10, 20+ years).

SIP vs. Lumpsum

A lumpsum investment puts your entire amount in at once. SIPs spread it out. SIPs are generally considered lower-risk for most individual investors since they don’t depend on getting the timing right.

Try It Yourself

Use our free SIP Calculator to estimate the maturity value of a monthly SIP or a one-time lumpsum investment based on your expected return and time horizon.

Frequently Asked Questions