What is SIP (Systematic Investment Plan)?
Investing a fixed amount at regular intervals (usually monthly) into mutual funds or an index.
A SIP automates investing a set sum each month. It uses unit cost averaging — you buy more units when prices are low and fewer when high — and benefits from long-term compounding. Returns aren't guaranteed and vary with the market.
Example
10,000/month for 20 years at 12% grows to roughly 10,000,000.
How a SIP works
A SIP invests a fixed amount on a set schedule regardless of the market level. When prices are low your money buys more units; when prices are high it buys fewer. Over time this cost-averaging smooths out your entry price and removes the temptation to time the market. Returns then compound: gains earn their own gains, and the last years of a long plan do most of the work.
SIP vs lump sum, and what to expect
Investing monthly spreads your risk across market ups and downs and is easier to budget than a lump sum; a lump sum can do better in a steadily rising market but carries more timing risk. Any return figure is a long-term historical average, not a promise — markets fall as well as rise, so a SIP suits money you can leave invested for many years.