What is a SIP and how it compounds your wealth
A Systematic Investment Plan (SIP) lets you invest a fixed amount periodically into mutual funds. Over long horizons, rupee-cost averaging and compounding make SIPs powerful. This article includes examples, an illustrative calculation, and practical tips on selecting funds, rebalancing and tracking performance.
Why SIPs work
By investing monthly you buy more units when prices are low and fewer when prices are high. Combined with equity returns, this often gives better outcomes than timing the market.
Practical tips
- Start early and be consistent.
- Choose diversified funds based on your risk profile.
- Use our SIP calculator to estimate outcomes.