A Systematic Investment Plan, or SIP, lets you invest a fixed amount in a mutual fund every month. Instead of trying to guess the right time to invest, you invest regularly, so you buy more units when prices are low and fewer when prices are high.
Why people choose SIPs
- It builds a regular investing habit.
- You can start with a small amount.
- It reduces the stress of trying to time the market.
- You can increase the amount as your income grows (a step-up SIP).
Things to remember
SIPs do not remove market risk, and returns are not guaranteed. The value of your investment can go up or down. A SIP works best when you stay invested for the long term and match the fund to your goal and comfort with risk.
Try our SIP calculator to see how different amounts and time periods could work, keeping in mind that the results are only illustrations.
Mutual Fund investments are subject to market risks. Read all scheme related documents carefully.
By Archana Sharma, AMFI-registered Mutual Fund Distributor (ARN 338632)