A Systematic Investment Plan (SIP) lets you invest a fixed amount into a mutual fund at regular intervals — usually monthly — rather than investing a lump sum all at once.
It builds discipline through automation and benefits from rupee-cost averaging: you buy more units when prices are low and fewer when prices are high, smoothing out the impact of market volatility over time.
Returns aren’t guaranteed since SIPs are still market-linked, but starting early and staying consistent through market ups and downs is usually what drives the biggest difference in outcome, more than timing the market.
Future Value = P × [((1+r)^n − 1) / r] × (1+r), where P = monthly SIP, r = monthly return, n = number of monthsExample.A ₹5,000 monthly SIP earning an assumed 12% annual return grows to roughly ₹50 lakh over 20 years, of which only about ₹12 lakh is money actually invested — the rest is compounding.