Glossary term
Rupee-cost averaging
Buying a fixed rupee amount at regular intervals — you accumulate more units when prices are low, fewer when high.
Rupee-cost averaging is the result of investing a fixed amount at regular intervals (like a SIP). Because the amount is fixed but the NAV varies, you accumulate more units when prices are low and fewer when prices are high. Over time, your average cost per unit is mathematically lower than the average NAV.
It doesn't eliminate the impact of timing — over a long bull market, lumpsum still beats SIP. But it removes the psychological burden of trying to time entries, and works well during volatile periods.
See also