What is a SIP?
A Systematic Investment Plan (SIP) is a method of investing a fixed sum of money in mutual fund schemes at regular intervals. Instead of investing a large amount at once (lumpsum), you invest smaller amounts periodically, typically monthly. This approach helps in averaging out the cost of investment and reduces the impact of market volatility.
How SIP Works
- • Invest a fixed amount every month
- • Buy more units when prices are low
- • Buy fewer units when prices are high
- • Average cost reduces over time
Benefits of SIP Investing
Financial Benefits
- Rupee Cost Averaging reduces impact of volatility
- Power of compounding works in your favor
- Flexible investment amounts and frequency
Practical Benefits
- Disciplined investing approach
- Start with small amounts (₹500+)
- Easy to pause or stop anytime
SIP Calculation Example
Investment Scenario
SIP Strategies for Different Goals
Emergency Fund (3-6 months expenses)
Conservative approach with liquid funds
Children's Education (10-15 years)
Balanced approach with equity savings
Retirement Planning (20-30 years)
Aggressive growth with equity-oriented funds
Getting Started with SIP
Choose Your Amount
Start with what you can afford consistently
Select Fund Category
Based on your risk tolerance and goals
Set Up Auto Debit
Ensure regular investments without manual intervention
Common SIP Mistakes to Avoid
❌ Stopping SIP during market downturns
Market volatility is when SIPs work best by buying more units at lower prices.
⚠️ Investing without clear goals
Define your investment objectives and time horizon before starting.
💡 Not reviewing portfolio regularly
Monitor your investments and rebalance when needed, but avoid frequent changes.
Success Tip
The key to successful SIP investing is consistency and patience. Start early, stay invested, and let compounding work its magic over time.