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Systematic Investment Plans (SIP) in India

The math, psychology, and compounding power of automated monthly investing.

A Systematic Investment Plan (SIP) allows you to invest a fixed amount regularly in mutual funds. It eliminates the futile anxiety of market timing, exploits rupee cost averaging during market dips, and transforms compounding into an automated monthly habit.

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Featured Cornerstone Guide
Beginner 5 min read

What Is a SIP? The Definitive Beginner's Guide

Understand how Systematic Investment Plans work, how NAV units are allotted, and why SIP beats irregular manual investing.

Core Takeaway:A Systematic Investment Plan (SIP) is a facility provided by mutual funds in India to invest a fixed sum of money at predetermined intervals (usually monthly) into a chosen mutual fund scheme. Instead of attempting to predict whether the market is at a peak or trough, a SIP automates buying units across all market levels.
Frequently Asked Questions

Common Questions About SIP

What happens if I miss or pause a SIP installment?

Missing a single installment or pausing your SIP does not attract penalties from mutual fund AMCs. Your existing accumulated units continue to grow and earn compounding returns unaffected.

Is SIP better than lumpsum investing?

For regular salaried earners, SIP is superior because it deploys income as it arrives and prevents market timing errors. Lumpsum investing can be beneficial if you receive a windfall or bonus during a significant market downturn, but historical rolling returns show that disciplined SIPs reduce downside volatility.

What is a Step-Up SIP?

A Step-Up (or Top-Up) SIP automatically increases your monthly investment by a fixed percentage (e.g., 10%) or rupee amount (e.g., ₹1,000) every year in tandem with salary appraisals, helping you accumulate nearly double the corpus over 15-20 years.

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