SIP stands for Systematic Investment Plan. It is a method of investing in mutual funds where you invest a fixed amount at regular intervals, such as monthly.
Here’s how it works in simple terms:
- Regular investment: Instead of putting a large amount in a mutual fund at once, you invest in smaller amounts over time. For example, you can invest 1000rs per month.
- Rupee Cost Averaging: By investing regularly, you buy more units when prices are low and fewer units when prices are high
- Discipline: SIPs encourage you to invest consistently, which can be a great way to build wealth over time without timing the market.
- Flexibility: You can start or stop your SIP whenever you want and you can also adjust the amount invested.
Overall, SIP is a convenient and disciplined way to grow your money gradually.