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SIP (Systematic Investment Plan): Meaning & Benefits of SIP Investment

Congratulations! You have just taken the first and most important step towards a financially secure future. We call it THE important step because you have identified the significance of investing, something a lot of people miss.

Now, the next best thing that you have done is you have gotten curious about SIP. Creating a financial corpus for the future is a smart move, no doubt. And what better approach to do so than by opting for a SIP – the smart way to invest.

We call it the smart way to invest because it is convenient, easy to invest in, and offers inflation-beating results. These factors make reaching your financial goals, a walk in the park.

Now we are sure you must be eager to learn more. So, without further ado, let us help you understand more about SIP.

What is a SIP?

A SIP or Systematic Investment Plan is a method to create wealth. However, unlike other avenues, this one is more convenient.

Through SIP you can invest a predetermined amount regularly, without the burden of investing a huge amount at once. It could be weekly, monthly or quarterly, whatever suits you best.

But why would such a periodic investment method be helpful?

Let's see:
a) It inculcates financial discipline and regular saving habits.
b) It eliminates the hassle of managing market fluctuations.
c) Your investments are made automatically at regular intervals. No additional effort needed.

Here's more detail on what makes SIP such an attractive investing method.

What are the benefits of SIP?

Both new and seasoned investors have experienced SIP to be a convenient method of achieving financial goals.

Here`s Why:

Power of Compounding

Even a small investment via a SIP can grow into a sizable amount with the power of compounding. So, the interest earned on your investment earns more interest over the years, allowing you to accumulate a considerable amount for your financial goals. You can learn more in detail about power of compounding here.

Rupee Cost Averaging

While the term might sound like something out of a math textbook, its role is quite important. Rupee cost averaging helps minimise the risk of market volatility. Which means, when the market is affected, your overall investment is protected in the best way possible. If you would like to know more, click here.

Ease of investing

A SIP is hands down one of the easiest modes of investing in mutual funds. All you have to do is instruct your bank to initiate auto-debits from your account. You can also start investing easily by clicking here.


Saving is not an easy task. Unexpected expenses pop up and then people end up saying "next time". By investing via SIP, you commit to saving regularly. This way, you can achieve your financial goals without deviating. You can also plan your investment based on your goals with the help of a SIP calculator.

Start Simple

The beauty of a SIP is that you don't need to invest big. You can start small and gradually increase your investment as per your convenience.

How to invest in SIP

While investing in a SIP is quite simple and hassle-free, there are a few steps to follow.

Set Your Goal Every investment has to have a specific goal or purpose. Defining a goal will help you factor in your expected corpus, the time you have to accumulate it, and the amount you need to invest. You can either use a SIP calculator to figure that out or get in touch with us.

Choose The Right Fund And SIP Picking the right fund is critical and should not be an uninformed decision. Our team will be more than happy to help choose the best mutual fund and the right SIP for you.

KYC All mutual fund investments require you to do a KYC registration. It can be done easily online at your comfort. Click here to know how. The online KYC process is uses your Aadhaar number, which is then further matched to your PAN number for cross-verification.

To do the KYC procedure offline, please get in touch with us and we will be happy to guide you. If you want more detail on how to invest, simply click here.

When to invest in a SIP

A straight-up answer to that would be, the earlier the better. Investing in an SIP is a continuous and evolving process, which is directly related to a person's financial goal. Since, financial goals may change due to age or other requirements over the years, so should the investment strategy.

SIP in 20s

This is the starting point of one's career and a great time to learn to invest and inculcate the habit of saving. Since a person usually has a low income at this age, one can start a SIP with a low figure. Know more.

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SIP in 30s

This is a time when one starts planning for financial goals like a house or paying for marriage. It is a perfect time to use the benefit of SIP and build the necessary corpus gradually. Know more.

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SIP in 40s

Family responsibilities are at an all-time high. A SIP will be a great way to plan for children's education or retirement. Know more.

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SIP in 50s & Above

When you are on the verge of retirement or are already retired, you need to create a robust financial plan to keep you secure so you can enjoy the lifestyle desired by you. Know more.

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Some might still have the dilemma to choose between Sip and Lump sum investment. Here's more information to help you decide.

How is SIP different from a Lump sum investment?

While SIPs and Lump sum investments have their differences, your investment approach depends on your goal and risk appetite.

Factors SIP`s Lumpsum
Investment amount • Choice of a lower investment
• Great for first-time investors
• Investment amount is comparatively higher than SIPs
Investment frequency • Monthly/weekly/quarterly as per your convenience • Current market scenario has to be considered at the time of investing
Market Understanding • Rupee cost averaging helps lower the average cost without having to worry about market conditions
• No need to time the market
• Current market scenario has to be considered at the time of investing
Flexibility • High • Low
Investment Horizon • 3-5 years advisable • 5-7 years advisable
Tip: If you don't have a steady source of income, it could be hard to invest on a regular basis. In such cases, lump sum investments are a better option.


An Equity-Linked Savings Scheme or ELSS is a kind of mutual fund. It invests primarily in equities. A SIP is a mode of investment where you invest a small amount monthly for purchasing units of a mutual fund. So one can invest in an ELSS mutual fund plan via SIP as the mode of investment.

Sip Insure

Life is full of uncertainties, and that is why it is always good to have a back-up plan, even for your SIP investment.

SIP Insure provides a life insurance cover under Group Term Insurance to individual investors. It is available for those undertaking SIP in specific schemes of Nippon India Mutual Fund, at no extra cost.

In the unfortunate event of an investor's death, their SIP investment will continue, and the SIP Insure cover will pay the remaining instalments.

It is a great way to help you fulfil your life goals.

We hope you have learned a lot about SIP and this information has helped clear your doubts. You can always reach us if you have questions and our experts will be more than happy to guide you.

If you feel confident about investing via SIP, you can Invest Now.

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