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June 14, 2026
The Dispatch

Definition

Systematic Investment Plan (SIP)

A SIP lets you invest a fixed amount at regular intervals (usually monthly) into mutual funds or stocks, automating disciplined investing.

SIPs apply rupee cost averaging and the power of compounding: a fixed monthly sum buys units regardless of market level, building wealth steadily over years. India's monthly mutual fund SIP inflows have crossed ₹20,000+ crore, a major source of DII buying.

While SIPs are most associated with mutual funds, brokers also offer SIPs directly in stocks and ETFs. The biggest advantage is behavioural: it keeps you investing through good and bad markets, the key to long-term success.

Related terms

  • DIIDIIs (Domestic Institutional Investors) are Indian institutions such as mutual funds, insurers, banks and pension funds that invest in the stock market.
  • Rupee Cost AveragingRupee cost averaging is the practice of investing a fixed amount at regular intervals, so you automatically buy more units when prices are low and fewer when prices are high.
  • CompoundingCompounding is when your returns themselves earn returns, accelerating growth the longer you stay invested.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.