← Mutual Funds and SIP · Lesson 2 of 3
SIP and the power of compounding
A SIP (systematic investment plan) means investing a fixed amount every month, even ₹500 or ₹1,000.
- Compounding: returns can earn further returns over time, so time matters a lot.
- Averaging: a fixed SIP buys more units when prices are low and fewer when high.
Illustration only: ₹5,000 a month for 20 years at an assumed 12% a year could grow to roughly ₹50 lakh. Actual returns may be higher or lower and are not guaranteed. Try the SIP calculator with your own numbers.
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