Glossary term

SIP

Investing a fixed amount in a mutual fund every month — the standard way salaried Indians build wealth.

A Systematic Investment Plan (SIP) is a way of investing a fixed amount in a mutual fund at regular intervals — almost always monthly. The AMC auto-debits your bank account and buys units at whatever the NAV happens to be that day.

SIPs work because they automate two hard things: discipline (you can't skip a payment) and timing (you buy more units when the market is low, fewer when high). This is rupee-cost averaging, and it's why SIPs dominate Indian mutual fund inflows.