What is SIP and How It Works in India

SIP (Systematic Investment Plan) is a method of investing a fixed amount regularly in mutual funds.

How SIP Works

You invest a fixed amount monthly. The amount buys units of a mutual fund based on NAV.

Example

If you invest ₹5,000 per month for 20 years at 12% return, your total investment = ₹12,00,000. Estimated value ≈ ₹49,00,000.

Benefits

• Disciplined investing
• Power of compounding
• Rupee cost averaging
• Low starting amount

Conclusion

SIP is suitable for beginners who want long-term wealth creation.