What is a SIP?
A Systematic Investment Plan (SIP) means investing a fixed amount into a mutual fund at regular intervals, usually monthly, instead of putting in one lump sum. It suits income you receive periodically and builds the habit of investing before you get a chance to spend it.
Because each instalment buys units at a different price, a SIP averages your purchase cost across market ups and downs—a benefit known as rupee-cost averaging—while still compounding the invested corpus over time.
M = P × [(1+r)n − 1] / r × (1+r)
M — maturity valueP — monthly investmentr — equivalent monthly returnn — number of months