What is Systematic Investment Plan (SIP)

SIP stands for Systematic Investment Plan. It's a method of investing in mutual funds where you invest a fixed amount regularly, like monthly or quarterly, rather than investing a large sum all at once. This disciplined approach helps you save and build wealth over time.
INVEST NOW
What is SIP Investment
INVEST NOW
5 mins
06-June-2025

Systematic Investment Plan or SIP is a method of investing in mutual funds wherein an investor chooses a mutual fund scheme and invests the fixed amount of his choice at fixed intervals.

SIP investment plan is about investing a small amount over time rather than investing a one-time huge amount resulting in a higher return.

What is SIP?

Systematic Investment Plan (SIP) is a method of investing in Mutual Funds allowing investors to contribute a fixed sum regularly, like monthly or quarterly, rather than a lump sum. This, starting from as low as Rs. 100 per month, is same as a recurring deposit and is hassle-free with automated monthly deductions. Popular among Indian Mutual Fund investors, SIP ensures disciplined investing. It is an ideal long-term investment strategy, emphasising the importance of starting early and consistent contributions for optimal returns. In essence, the mantra is to "Start Early, Invest Regularly" for the best outcomes in long-term investments.

Now that you understand how SIP works, it's time to put this knowledge into action. Whether you're investing for long-term wealth creation or financial security, consistency is key. Start Your SIP and Grow Your Wealth!

How does an SIP work?

A Systematic Investment Plan (SIP) functions like a recurring investment. A fixed amount is auto-debited from your bank account at regular intervals (usually monthly) and invested in the mutual fund scheme of your choice.

Once the amount is invested, you’re allotted units of the mutual fund based on its Net Asset Value (NAV) on that day. The NAV changes daily, which means:

  • When the NAV is low, your SIP buys more units
  • When the NAV is high, your SIP buys fewer units

This mechanism is known as rupee cost averaging — one of the core benefits of SIPs.

With every SIP instalment, more units are added to your investment. Over time, this consistent investing helps average out market fluctuations.

So, why is SIP considered an ideal investment?

There are two key concepts that explain how SIPs work to your advantage:

  1. Rupee Cost Averaging
    It cushions your investment against market volatility by buying more units when prices are low and fewer when prices are high — helping average out the cost per unit over time.

  2. Power of Compounding
    SIPs reward discipline. The longer you stay invested, the more your earnings generate their own returns, leading to exponential growth over time.

cross

Search Mutual Funds & Add to Compare

search

Pro tip

DIVERSIFY your investments | MAXIMISE returns | MINIMISE effort
Discover over 1,000+ Mutual Fund schemes with ease. 
Exclusive the Bajaj Finserv Mutual Funds platform.

MF Pro Tip banner

Learn SIP through an Example

Let’s say you decide to invest Rs. 10,000 every month through an SIP in a mutual fund called “B.” The number of units you receive depends on the fund’s Net Asset Value (NAV) at the time of each investment.

Here's how your investments could look over four months:

Month

Investment Amount

NAV (Rs. )

Units Bought

Total Units in Portfolio

1

Rs. 10,000

Rs. 80

125

125

2

Rs. 10,000

Rs. 85

118

243

3

Rs. 10,000

Rs. 75

133

376

4

Rs. 10,000

Rs. 90

111

487


As shown above, your Rs. 10,000 buys a different number of units each month based on the NAV. When the NAV is low, you get more units; when it’s high, you get fewer. Each month, the new units are added to your portfolio, helping it grow over time.

This approach helps reduce the overall impact of market volatility — a benefit known as rupee cost averaging — making SIPs a smart and stable way to build wealth gradually.

Features of SIP investment plan

Here are some features of SIP investment plans:

1. Rupee cost averaging

SIP uses the strategy of rupee cost averaging, helping investors benefit from market fluctuations. During market downturns, the fixed investment buys more mutual funds units, and during upswings, it buys fewer units. This approach helps mitigate the impact of market volatility over time.

2. Disciplined and consistent investing

SIP promotes financial discipline by allowing investors to commit to regular contributions regardless of market conditions. This disciplined approach encourages consistency in investing, fostering a habit of regular savings and wealth creation.

3. Flexibility in investment amount

Investors have the flexibility to choose the amount they want to invest in SIP, making it accessible for a wide range of investors with varying budget sizes. This feature accommodates both small and large investors, enabling them to start with an amount that suits their financial capacity.

4. Professional fund management

SIP investments are managed by professional fund managers who make informed investment decisions based on market conditions and the fund's objectives. This professional management aims to optimise returns and effectively manage risks, providing investors with the expertise needed for successful mutual fund investments.

5. Long-term wealth creation

SIP is designed for long-term wealth creation. Through consistent and disciplined contributions, coupled with the power of compounding, investors can potentially achieve significant returns over an extended period. This long-term approach aligns well with financial goals such as retirement planning or building a corpus for major life events.

6. Option to temporarily halt investments

SIP provides the convenience of temporarily suspending investments, offering valuable flexibility, especially during financial challenges. The SIP automatically resumes at the end of the pause period. It is recommended to verify the availability of this pause feature with your Mutual Fund provider.

7. Unrestricted investment ceiling

With a minimum SIP investment of Rs. 100 and no strict upper limit, investors can contribute any amount of their choice through the SIP. Ensuring the ongoing consistency of SIP investments throughout the plan's duration is essential for optimal results.

Benefits of SIP Investment

A Systematic Investment Plan (SIP) in mutual funds lets you invest a fixed amount of money at regular intervals — typically every month. On a specific date each month, the chosen amount is automatically invested in the mutual fund scheme of your choice. While the SIP amount remains constant, the Net Asset Value (NAV) of the fund changes daily. This means each instalment of your SIP will buy a different number of units depending on the NAV on the day of investment. This very feature — consistent investing at varying NAVs — unlocks several advantages of SIPs, which we’ll explore next.

1. Disciplined investment

Systematic Investment Plans (SIPs) involve investing a fixed amount regularly — usually every month — into a mutual fund of your choice. This not only helps you build a consistent saving habit but also allows your money to grow over time through a market-linked investment with the potential to outpace inflation. While traditional options like recurring deposits also encourage saving, mutual funds stand out by offering the possibility of higher, inflation-beating returns — something most fixed-income instruments don’t provide. Want to see how disciplined, long-term investing can grow your wealth? Try using an SIP calculator to visualise your returns.

2. Cost-effective

Investing through SIPs is a budget-friendly way to enter the market. Instead of needing a large lump sum, you can start building your portfolio gradually with small, regular contributions. This reduces the financial strain and makes mutual fund investing more accessible to a wider range of investors.

3. Power of compounding

Compounding is when your investment returns start generating their own returns — a simple idea with powerful long-term benefits. With SIPs, your regular investments — along with the returns they generate — are continuously reinvested. Over time, this creates a snowball effect, significantly boosting your overall gains. The longer you stay invested, the more this compounding power works in your favor. That’s why starting early and staying consistent with your SIPs is key to maximizing wealth creation.

4. Flexibility

One of the key advantages of SIPs is the flexibility they offer in terms of investment duration. While some mutual funds may require a minimum of 6 SIP instalments, there’s no upper limit — you can continue investing for as long as you like. This kind of flexibility isn’t usually available with lump sum investments, where you're often committing a large amount at once without the option to space it out or adjust over time.

5. Lower Risk

The rupee cost averaging strategy employed by SIPs helps mitigate the impact of market volatility. During market downturns, fixed investments acquire more units, and during upswings, fewer units are bought. This strategy lowers the average cost of acquisition, reducing the overall risk and providing a more stable investment journey.

6. Convenience

Convenience is another major benefit of SIPs. You don’t need to constantly track the markets or spend time on in-depth research to time your investments. Once you’ve selected a suitable mutual fund, all it takes is a one-time setup. With standing instructions to your bank, the SIP amount is automatically debited each month — ensuring consistent investing without any manual effort or missed opportunities.

7. Lower Investment Capital

SIPs allow you to start investing with a relatively small amount, making it accessible to a broader range of investors. With lower minimum investment requirements, you can begin building your portfolio with modest contributions. This gradual approach helps accumulate wealth over time without needing a substantial initial capital outlay.

8. SIPs Offer Flexibility

A key advantage of SIPs is the flexibility they offer in terms of how long you can stay invested. While some mutual funds may require a minimum of six SIP instalments, there’s no upper limit — you can continue investing for as long as you want. This freedom to invest for a short or extended period isn’t typically available with lump sum investments, which require committing a large amount at once without the option to space out contributions over time.

9. SIPs Offer Diversification

One of the built-in advantages of SIPs is diversification. Your investments are spread across a range of assets, which helps reduce overall risk. This means that even if one part of the portfolio underperforms, the impact on your overall returns is minimised — helping protect your wealth and improve long-term growth potential.

10. Professionally Managed Investment

When you invest through SIPs, your money is managed by experienced professionals who carefully oversee the mutual fund portfolio. Their expertise helps strategically navigate market ups and downs, aiming to maximise growth opportunities while effectively managing risks on your behalf.

11. Passively Managed Funds

SIPs can also include passively managed funds, such as index funds or ETFs. These funds track specific market indices and aim to replicate their performance rather than actively selecting stocks. Passively managed funds often have lower fees and can provide broad market exposure, making them a cost-effective option for SIP investors.

When to invest in SIP?

SIP investments grow over time, so the sooner you start, the greater your potential to build wealth. Starting your SIP at the beginning of the month can help you stay financially disciplined while maximising the benefits of rupee cost averaging.

1. When you have a long-term investment horizon

SIPs work best when the investment is allowed to grow over an extended period. A long-term approach allows you to ride out market volatility and benefit from compounding.

2. When you want to average your investment cost

SIPs allow you to invest a fixed amount regularly, which helps average the cost of your investment. This strategy, known as rupee cost averaging, reduces the impact of market fluctuations.

3. When you can invest consistently

To gain the full benefit of SIPs, consistency is key. Invest every month without fail, regardless of market conditions, to ensure your investments continue to grow steadily.

4. When market conditions are volatile

Starting an SIP during market downturns or periods of volatility can be advantageous. You can buy more units when prices are low, increasing the potential for higher returns when the market rebounds.

5. When you have disposable income

Only invest in SIPs if you have a steady income and disposable funds available. Ensure your SIP contributions do not interfere with your immediate financial needs.

6. When you are focused on financial goals

Before starting an SIP, it’s essential to have clear financial goals. Whether it’s retirement, buying a house, or funding education, aligning your SIP with your goals will help you stay focused and motivated.

Types of SIP

SIPs offer a disciplined and effective method to reach your financial goals. By starting with small, regular investments, you can take advantage of rupee cost averaging — making it easier to grow your wealth steadily over time.

There are various types of SIPs designed to suit different needs. For instance, a Flexible SIP is ideal for those with irregular income, like freelancers, allowing you to pause, resume, or adjust your investments as your cash flow changes. Meanwhile, a Trigger SIP lets you invest strategically by setting specific market conditions for your investments, giving you greater control over your financial growth.

  1. Regular or Fixed SIPs
    In Regular SIPs, you invest a fixed, predetermined amount every month. This traditional approach promotes disciplined investing and is perfect for those who prefer consistency and predictability in their contributions.
  2. Top-up SIPs
    Also known as Step-up SIPs, these allow you to gradually increase your investment amount at regular intervals. This is ideal if you expect your income to grow over time and want to boost your wealth-building potential by investing more.
  3. Flexible SIPs
    Flexible SIPs let you adjust your monthly investment based on your portfolio’s current value. You invest more when market prices are low and less when they are high, aiming for steady growth by leveraging market fluctuations.
  4. Multiple SIPs
    With Multiple SIPs, you can invest in several mutual fund schemes simultaneously through one plan. This helps diversify your portfolio and spread risk across different funds, enhancing overall stability and return potential.
  5. Perpetual SIPs
    Perpetual SIPs have no fixed end date, allowing you to invest continuously for as long as you wish. This option suits long-term investors focused on building wealth steadily over many years without worrying about renewing their plan.
  6. Trigger SIPs
    Trigger SIPs enable you to set specific market conditions or trigger points for investments. When these conditions are met, your SIP is automatically activated — ideal for investors who want to strategically time their entries based on market movements.

Who can benefit from systematic investment plans (SIP)?

Systematic Investment Plans (SIPs) are ideal for a broad spectrum of investors — from beginners to seasoned professionals — aiming to build wealth steadily through a disciplined, systematic approach. SIPs are especially advantageous for those who prefer to invest regularly in small amounts without worrying about timing the market.

Here’s a detailed look at who stands to gain the most from SIPs:

  • Beginners:
    SIPs offer a simple and accessible way to start investing. You can begin with small amounts and gradually increase your contributions as you become more confident, making it easier to build an investment habit. (Source: Bajaj Finserv)

  • Long-term Investors:
    For those focused on wealth creation over time, SIPs leverage the power of compounding and rupee cost averaging, helping grow your investments steadily. (Source: Motilal Oswal)

  • Individuals Seeking Discipline:
    SIPs encourage regular saving and investing, perfect for anyone who struggles with consistent savings or wants to avoid impulsive investment decisions.

  • Investors Wanting to Reduce Market Timing Risks:
    SIPs enable you to invest systematically regardless of market conditions, lowering the risk associated with trying to perfectly time the market. This helps manage the effects of market volatility by spreading investments over time.

  • Those Needing Flexible Investment Options:
    SIPs offer flexibility in investment amounts, frequency, and duration, allowing you to adjust your plan as your financial situation evolves.

  • Individuals with Limited Capital:
    If you don’t have a large lump sum to invest, SIPs allow you to participate with smaller, regular contributions, making investing more affordable.

  • Investors Looking for Diversification:
    SIPs help diversify your portfolio across different asset classes within mutual funds, reducing risk and improving potential returns. (Source: Mutual Funds Sahi Hai)

How to choose right SIP to invest in India?

Starting a Systematic Investment Plan (SIP) is one of the smartest investment choices you can make. It not only promotes discipline and regular investing but also requires thoughtful planning to maximise its benefits.

SIP allows you to invest a fixed amount regularly, starting from as low as Rs. 500. Beginning early can significantly boost your returns over time. Plus, with rupee cost averaging, SIP helps you navigate market fluctuations effectively—even if you’re a millennial investor.

Here are 5 essential tips to guide you before you begin your SIP journey:

1. Define a Clear Investment Objective

Many investors invest in mutual funds just to save taxes or park extra cash. However, mutual funds offer much more—they can help you achieve various financial goals, whether short-term or long-term. Before starting an SIP, establish a clear financial plan. Understand your investment horizon and assess your risk appetite.

2. Choose the Right Fund Type

To pick the best SIP plan for yourself, it’s important to know which mutual fund suits your profile. For instance, if you’re risk-averse and prefer steady returns, debt funds might be the best choice.

Here’s a quick overview of fund types:

  • Equity (Asset-based) Funds: Invest in stocks and securities; include mid-cap, small-cap, sector, and index funds.

  • Debt Funds: Invest in bonds and debt securities; categorized by tenure into money market, income, and fixed maturity funds.

  • Balanced Funds: A mix of both equity and debt investments.

  • Structured Funds: Can be open-ended (invest anytime, exit anytime) or close-ended (fixed investment period, typically tied to a New Fund Offer or NFO).

3. Review the Fund’s Past Performance

Before choosing a SIP, analyze the fund’s historical returns over the last 5 to 10 years. Comparing multiple funds helps you understand their resilience against market volatility and their potential for steady growth.

4. Select a Reliable Fund House

Choosing the right fund house is as crucial as selecting the fund itself. Research their investment philosophy, the variety of schemes they offer, and their track record. A trustworthy fund house can make a significant difference in your long-term returns, while a poor choice may lead to losses.

5. Consider the Expense Ratio

The expense ratio covers the management and administrative fees of a fund. Higher expense ratios can eat into your returns over time. Opting for funds with a lower expense ratio is usually wiser, as even a small difference can have a big impact on your wealth in the long run.

How to start a SIP in mutual fund?

Starting a Systematic Investment Plan (SIP) is a straightforward process that can help you build wealth through disciplined and regular investments. By following these steps, you can begin your SIP journey with ease and confidence.

  • Step 1: Identify your financial goals
    Determine what you want to achieve with your investments, whether it's saving for a child's education, retirement, or a major purchase. Clear financial goals will help you choose the right mutual fund and set appropriate investment amounts and durations.
  • Step 2: Select the appropriate mutual fund
    Research various mutual funds to find one that aligns with your risk tolerance, investment horizon, and financial goals. Look at factors such as historical performance, fund manager reputation, and the underlying assets in the fund.
  • Step 3: Choose the SIP amount
    Decide on the amount you want to invest regularly. This should be an amount you can comfortably contribute each month without affecting your essential expenses. Ensure it aligns with your overall financial plan and goals.
  • Step 4: Choose the duration of your investment
    Select the duration for your SIP based on your financial goals. You can choose a short-term or long-term investment horizon, depending on when you need the funds. Typically, longer durations benefit from compounding.
  • Step 5: Open a mutual fund account
    Complete the necessary paperwork to open a mutual fund account with your chosen fund provider. This usually involves filling out forms, providing identification documents, and completing KYC (Know Your Customer) requirements.
  • Step 6: Automate your debits
    Set up an auto-debit instruction with your bank to ensure your SIP contributions are made automatically on the specified dates. This eliminates the need to manually transfer funds and ensures consistency in your investments.
  • Step 7: Track your SIPs
    Regularly monitor the performance of your SIP and review your mutual fund statements. Keep an eye on how your investments are performing relative to your goals and make adjustments if necessary.
  • Step 8: Be patient and persistent
    SIPs are designed for long-term wealth accumulation. Stay committed to your investment plan and avoid making impulsive decisions based on short-term market fluctuations. Patience and persistence are key to achieving your financial objectives.

Opening a mutual fund account is the first step toward disciplined investing. With an SIP, you can systematically build wealth over time. Open Your Mutual Fund Account Today!

Myths about SIP investments explained

Systematic Investment Plans (SIPs) have become one of the most popular investment methods in India. They allow you to invest a fixed amount at regular intervals, choose how often you want to invest, and benefit from rupee cost averaging. However, several misconceptions about SIPs persist, and believing these myths could cause you to miss out on excellent investment opportunities.

Let’s clear up some of the most common myths about SIPs:

Myth #1: If Recent Returns Are Poor, You Should Stop Your SIP

This is one of the biggest misunderstandings about SIPs. A short-term dip in returns doesn’t mean you should stop investing. SIPs are designed for the long term—typically 10-12 years—to maximize wealth creation. Temporary setbacks are normal, and reacting hastily to them can cause you to lose out on significant growth opportunities. Patience is key.

Myth #2: SIPs Are Too Risky Because They Are Market-Linked

Yes, equity mutual funds do experience market volatility. But SIPs actually help you manage this risk. When the market is down, your fixed SIP amount buys more units; when the market is up, you buy fewer units. This rupee cost averaging reduces the impact of market swings over time. The key is to stay invested for the long haul—again, around 10-12 years—to smooth out fluctuations and reap good returns.

Myth #3: SIPs in Low NAV Funds Give Higher Returns

Many believe that funds with a low Net Asset Value (NAV) are cheaper and will yield better returns. This is a misconception. NAV is just the price of one unit of the fund and doesn’t determine its performance or returns. For example, investing Rs. 5,000 in a fund with an NAV of Rs. 10 means you buy 500 units; in a fund with an NAV of Rs. 50, you buy 100 units. Either way, your total investment value is the same. Focus on the fund’s track record against its benchmark, not its NAV.

Myth #4: SIPs Are Only for Small Investors

While SIPs let you start investing with small amounts (usually a minimum of Rs. 500), you can invest much larger sums as well. There’s no upper limit to how much you can invest through SIPs, making them suitable for investors of all sizes.

Myth #5: The SIP Amount Can’t Be Changed

Contrary to this belief, you can increase or decrease your SIP contributions anytime based on your convenience. All you need to do is inform your bank or fund manager, and the changes will be reflected in your future investments.

How to use an SIP calculator to invest in SIPs?

A Systematic Investment Plan (SIP) calculator is a valuable tool for investors to estimate potential returns on their SIP investments. It helps in financial planning by providing clarity on how much to invest and for how long to achieve specific financial goals. By inputting basic details such as monthly investment amount, expected rate of return, and investment duration, investors can get an estimate of their future corpus. Below is a step-by-step guide on how to use an SIP calculator effectively.

A. Enter your monthly investment amount

Start by entering the amount you wish to invest every month in an SIP. This could be any amount based on your financial capacity. The SIP calculator will use this figure to estimate the growth of your investments over time.

B. Select the expected rate of return

The next step is to input the expected annual return rate. Mutual fund SIPs do not offer fixed returns, so consider past fund performance, historical market trends, and risk factors when estimating returns. Generally, equity mutual funds offer higher return potential, while debt funds provide stability.

C. Choose your investment tenure

Specify the number of years you plan to invest in the SIP. Longer investment durations typically yield better returns due to the power of compounding. Investors should align their tenure with their financial goals, such as wealth creation, child’s education, or retirement planning.

D. View projected returns

Once all details are entered, the SIP calculator will compute the projected corpus. The tool applies the compound interest formula to estimate the total value of your investment at the end of the chosen period. This helps in setting realistic investment expectations.

E. Adjust inputs for different scenarios

SIP calculators allow investors to modify inputs to see different outcomes. You can adjust the monthly investment amount, tenure, or return rate to compare different investment scenarios and choose the most suitable plan for your goals.

Things to consider before starting SIP

Before embarking on a Systematic Investment Plan (SIP), it's crucial to assess several factors to ensure it aligns with your financial goals and circumstances. SIPs can be a powerful tool for disciplined investing, but careful consideration is key to maximising their benefits. Here are seven important factors to evaluate before starting an SIP:

1. Define your investment goals

Clearly outline your financial objectives, such as saving for retirement, education, or a major purchase. Your goals will influence the type of mutual funds you should invest in and the duration of your SIP.

2. Assess your risk tolerance

Understand your risk appetite and choose mutual funds accordingly. Different funds have varying levels of risk and return potential, so selecting one that matches your comfort level with market fluctuations is essential.

3. Evaluate fund performance

Research the past performance of the mutual funds you are considering. While past performance is not a guarantee of future returns, it can provide insights into the fund’s stability and performance trends.

4. Consider the investment horizon

Determine how long you plan to invest. SIPs are most effective over the long term, so ensure your investment horizon aligns with the fund’s strategy and your financial goals.

5. Review fund management fees

Analyse the expense ratio and other fees associated with the mutual funds. High fees can erode your returns over time, so opt for funds with reasonable management costs.

6. Check the SIP amount and frequency

Decide on the amount and frequency of your SIP contributions. Ensure that the chosen amount fits within your budget and allows for consistent investing without straining your finances.

7. Understand tax implications

Be aware of the tax benefits and implications of SIP investments. Some mutual funds offer tax-saving benefits under sections like 80C, while others might impact your taxable income.

By considering these factors, you can make informed decisions and set yourself up for a successful SIP investment journey.

Conclusion

In conclusion, SIP or Systematic Investment Plan is a simple and disciplined approach to investing in mutual funds that helps individuals to build wealth over the long term. SIP mutual funds are a good investment option for individuals who want to create long-term wealth through disciplined and regular investing.

It is crucial to invest for the long term, which means you should get started as soon as possible to optimise your results. To get the most out of your assets, your motto should be to start early, invest regularly.

Essential tools for all mutual fund investors

Mutual Fund Calculator

Lumpsum Calculator

Step Up SIP Calculator

Axis Bank SIP Calculator

SBI SIP Calculator

HDFC SIP Calculator

ICICI SIP Calculator

Invesco SIP Calculator

Nippon India SIP Calculator

ABSL SIP Calculator

Groww SIP Calculator

Kotak Bank SIP Calculator

Top performing funds

Equity

Debt

Hybrid

Tax saver

View All
View all
cross

Search Mutual Funds & Add to Compare

search
cross

Search Mutual Funds & Add to Compare

search

Frequently asked questions

What is meant by SIP investment?

A Systematic Investment Plan (SIP) is a strategy for investing in mutual funds, where you invest a fixed amount at regular intervals. This approach enables you to make smaller investments over time, which leverages the power of compounding and helps reduce the impact of market volatility through rupee cost averaging.

Is SIP better than FD?

SIP and Fixed Deposit (FD) serve different purposes. SIP offers market-linked returns with potential for higher growth, while FD provides fixed returns with lower risk. The choice depends on individual financial goals and risk tolerance.

Can I invest Rs. 1,000 per month in SIP?

Yes, many SIPs have a low entry point, allowing investors to start with amounts as low as Rs. 1,000 per month, making it accessible for a wide range of investors.

Is SIP 100% safe?

SIPs are generally considered safer than many other investment options, but they are not entirely risk-free. The risks involved are tied to market fluctuations, and the returns depend on the performance of the underlying mutual fund. Therefore, while SIPs offer a disciplined investment approach, the outcomes can vary based on market conditions.

What is SIP Rs. 5,000 per month for 20 years?

If you invest Rs. 5,000 per month through SIP for 20 years, assuming 12% return. The estimate total returns will be Rs. 37,95,740 and the estimate future value of your investment will be Rs. 49,95,740.

Can I withdraw SIP anytime?

Yes, SIP investments offer flexibility, allowing you to withdraw your funds at any time. However, it's essential to check if there are any exit loads or charges associated with early withdrawals.

How much is Rs. 50,000 monthly SIP for 5 years?

If you invest Rs. 50,000 per month through SIP for 5 years, assuming 12% return. The estimate total returns will be Rs. 11,24,318 and the estimate future value of your investment will be Rs. 41,24,318.

Is SIP risk-free?

SIPs (Systematic Investment Plans) are subject to market risks, as they invest in mutual funds that fluctuate with market movements. However, investing regularly over time can help mitigate risk through rupee cost averaging.

Does SIP pay monthly?

SIPs offer flexibility in frequency, allowing investors to choose monthly, quarterly, or other intervals for investment contributions, depending on their preferences and financial goals.

How can I start SIP?

Starting a SIP is simple. Investors can approach a mutual fund provider or use online platforms to select a fund, specify the investment amount and frequency, and set up automatic deductions from their bank accounts.

Can SIP go in loss?

Yes, SIP investments can incur losses, especially during market downturns. However, investing regularly over the long term may help offset losses through rupee cost averaging and the potential for market recovery.

Is SIP good for beginners?

SIPs are often recommended for beginners due to their simplicity, affordability, and ability to instill disciplined investing habits. They offer a convenient way for novice investors to start building wealth gradually over time.

What is the 8:4:3 rule in SIP?

The 8:4:3 rule suggests allocating 80% of SIP investments to equity funds, 40% to mid-cap funds, and 30% to small-cap funds. This strategy aims to balance risk and return potential while diversifying across different market segments.

What is SIP and how does it work?

A Systematic Investment Plan (SIP) is a method of investing regularly in mutual funds, typically on a monthly or quarterly basis. It enables you to invest a fixed amount over time, irrespective of market conditions, benefiting from rupee cost averaging and compounding. SIPs offer a disciplined approach to building long-term wealth.

What is the SIP of Rs. 5,000 per month for 10 years?

Investing Rs. 5,000 monthly in an SIP for 10 years can grow significantly based on the annual return rate. Assuming a 12% annual return, your total investment of Rs. 6,00,000 may grow to approximately Rs. 11.61 lakhs. The actual corpus depends on market performance and the fund’s growth rate.

What is the minimum amount required to start a Systematic Investment Plan (SIP)?

The minimum SIP amount typically starts at Rs. 500, but this can vary depending on the specific mutual fund scheme you choose.

What does the power of compounding mean?

Compounding is when your investment earns returns not only on the original amount but also on the accumulated returns, helping your wealth grow faster over time.

What is rupee cost averaging?

Rupee cost averaging means you buy more fund units when prices are low and fewer when prices are high. This strategy helps reduce the impact of market volatility on your investments.

What is a Top-up SIP?

A Top-up SIP lets you gradually increase your investment amount over time, helping you align your SIP contributions with your growing financial goals.

Why invest in SIP Mutual Funds?

SIP mutual funds promote disciplined investing and offer benefits like rupee cost averaging. They also provide flexibility in how much and how often you invest, making them ideal for both short-term needs and long-term wealth building.

Is SIP a stable investment option?

SIPs offer relative stability because they spread your investments over time, reducing risk. Plus, investing in diversified mutual funds gives you a balanced approach to potential growth.

What types of SIP plans are available?

There are different types of SIPs to suit your risk and goals: equity SIPs (focused on stocks), debt SIPs (focused on fixed-income assets), and hybrid SIPs (a mix of both equity and debt).

Show More Show Less

Related Videos

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-qualified limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

Bajaj Finance Limited (“BFL”) is an NBFC offering loans, deposits and third-party wealth management products.

The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. 

This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.

Disclaimer:

Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as 'Mutual Funds) with ARN No. 90319

BFL does NOT:

(i) provide investment advisory services in any manner or form:

(ii) carry customized/personalized suitability assessment:

(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.

In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other/better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.

Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.

Disclaimer on Risk-O-Meter:

Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc, and shall also consult their Professional advisors, if they are unsure about the suitability of the scheme before investing.


Disclosure: Bajaj Finance Limited (BFL) is a distributor of Mutual Funds with ARN - 90319 and distributes mutual funds of Bajaj Finserv Asset Management Limited (BFSAMC). BFL receives commission towards distribution of mutual fund products. BFSAMC is a group company of BFL, carrying business on arm’s length basis without any conflict of interest and in accordance with the prevailing law / regulation.