What is Systematic Investment Plan (SIP)

Systematic Investment Plan (SIP) is a disciplined way of investing, where you invest fixed amounts at a regular frequency. You often decide to start saving and investing regularly, but get caught up in your day to day activities and forget investments. SIP, the time tested investment approach helps bring in the much-needed discipline, and has shown good results the world over.

How does a SIP work?

It is a very simple, yet powerful concept. Once you have identified the schemes that you want to invest in and the savings required to achieve your goals, all you have to do is give us monthly/quarterly post-dated cheques for the amount you want to invest. We will allot you units of the schemes based on the prevailing selling price on the date of your transactions, and these will be credited to your scheme account.

What's special about SIP?

In addition to getting you into the habit of saving regularly, SIP puts two powerful forces to work for you.


Amount you invest


No. of units


Rs. 1000
Rs. 1000
Rs. 1000
Rs. 1000
Rs. 1000

Rs. 10
Rs. 12
Rs. 10
Rs.  8
Rs. 10



Rs. 5000

Rs. 50


The average NAV = 50/5 = Rs. 10.00

Your average price = Your total investment / Total no. of units

                          = 5000 / 508.333 = Rs. 9.84

What you see from the table above is the fascinating aspect of Rupee Cost Averaging. It makes you busy fewer units when the price is high and more units when the price is low, thereby bringing down your average cost. Moreover, this gives you the same discipline as investment professionals. While Rupee Cost Averaging does not assure you of a profit, it is known to have worked well for millions of investors throughout the world.

Advantages of SIP

An SIP helps you reach your financial goals by investing a fixed sum monthly / quarterly, in your chosen fund, for a pre-determined number of periods. So that you -

Average out on market fluctuations (no need to time the market).

Get investment discipline, helping you invest for and reach your future goals.

Invest disposable funds – that might otherwise lie in Savings accounts, earning low interest and letting inflation eat into them.

How to start an SIP

Pick any date of a month, then fill out an SIP form and an application form.

Draw post-dated monthly / quarterly cheques , adding up to at least minimum investment of scheme.

Monthly - Start with any dates of any month, and stick to the same date of every month.

Quarterly - Start on of any month, and stick to the same date of every third month.

If in any month the chosen date is not a Working Day, the transaction will be completed on the next Working Day

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