SIP (Systematic Investment Plan)

A systematic investment plan (SIP) is a disciplined way of investing your
funds. It works on the principle of regular investing. SIPs allow you to
invest a prefixed amount for a prefixed interval in a mutual fund scheme
of your choice. On the defined date, the amount indicated by you will be
automatically debited from your bank account and invested in the scheme
selected by you. Hence, after you have set an SIP you are not required to
track the investment dates

BENEFITS OF SIP

Avoid timing the market: By investing a small amount regularly
into the schemes you can avoid the common error of investing
larger sums in bull markets (when the markets are at a high) and
smaller sums in bear markets (when the markets are at a low)

Rupee cost averaging: An SIP allows you to invest a pre-specified
amount in a scheme at periodic intervals (e.g. one month, three
months, etc). Therefore, whenever the market moves down and
the net asset value (NAV) of the scheme is lower, you end up
buying more units of the scheme. If the market moves up, the
NAV of the scheme rises and you will get less units of the
scheme. Hence, the average cost of purchase works out lesser

Not just savings but investing too: Usually we tend to save some
amount but fail to invest the same. An SIP not only imparts
savings it invests your capital and frees you from answering the
question of where to invest each time you save