SIP

A SIP is a disciplined way to invest a fixed amount into a mutual fund scheme at a fixed interval — usually monthly, debited automatically from your bank account on a chosen date. It converts investing from a market-timing decision into a payroll-style habit, which is why Indian mutual fund AUM collected via SIPs crossed ₹25,000 crore per month in 2024. For most salaried investors, SIP is the single most effective wealth-building tool available.

The core mechanic is rupee-cost averaging: when NAV falls, your fixed ₹10,000 buys more units; when it rises, it buys fewer. Over a long horizon, the average cost per unit tends to sit below the simple arithmetic average of NAVs. Combined with compounding, the results are striking — ₹10,000/month for 20 years at a 12% long-run equity return grows to roughly ₹1 crore, of which only ₹24 lakh is your contribution.

SIPs in equity mutual funds are subject to LTCG rules on each instalment separately (12 months holding, 12.5% above ₹1.25L/year post Budget 2024). ELSS SIPs also qualify for 80C deduction but each instalment has its own 3-year lock-in.

Use our SIP calculator to model monthly contribution, step-up percentage, expected return, and horizon — then see the final corpus and the total you would have invested.