A SIP automates investing. You commit a set amount, say ₹5,000 a month, and it is deducted automatically and used to buy units of your chosen mutual fund. Because you invest on the same date every month regardless of price, you buy more units when markets are low and fewer when they are high — a benefit known as rupee cost averaging.
The main appeal is discipline and the power of compound interest over time. A ₹5,000 monthly SIP earning about 12% a year would grow to roughly ₹11.6 lakh in 10 years, even though you only put in ₹6 lakh.
SIPs suit people investing from a regular salary rather than a windfall. You can start, pause, increase or stop them at any time, which makes them flexible as well as beginner-friendly.