SIP (Systematic Investment Plan) is India's most popular mutual fund investment method. An investor authorises the AMC/RTA to auto-debit a fixed amount from their bank account on a set date each month, which is invested in the chosen scheme at that day's NAV.

Benefits of SIP

  • Rupee Cost Averaging: Buys more units when NAV is low and fewer when NAV is high — reducing average cost over time
  • Power of Compounding: Long-term SIPs benefit from reinvestment of returns
  • Disciplined Saving: Automates investing, removing emotional decision-making
  • Flexible amounts: Start with as little as ₹100–500/month

SIP performance is measured using XIRR (Extended Internal Rate of Return), not simple returns, to account for different investment dates.