A Systematic Investment Plan (SIP) is an investment vehicle offered by many mutual funds to investors, allowing them to invest small amounts periodically instead of lump sums. The frequency of investment is monthly, quarterly, semi-annually, and annually. In SIPs, a fixed amount of money is debited by the investors in bank accounts periodically and invested in a specified mutual fund. The investor is allocated several units according to the current Net asset value. Every time a sum is invested, more units are added to the investors account. SIPs claim to encourage disciplined investment and are flexible; the investors may stop investing in a plan anytime or may choose to increase or decrease the investment amount. SIPs are usually recommended to retail investors who do not have the resources to pursue active investment.

Benefits of SIP include:

• Cost averaging: SIPs allow investors to invest a fixed amount regularly, regardless of market conditions. This strategy helps buy more units when prices are low and fewer when prices are high, potentially reducing the average cost per unit over the long run.
• Disciplined investing: SIPs encourage disciplined investing by automating regular investments. Investors commit to investing a fixed amount regularly, promoting a consistent savings habit.
• Accessibility: SIPs are accessible to retail investors who may not have significant resources to pursue active investment.

SIPs can be utilized to invest in various investment instruments such as mutual funds[[2]](https://www.investopedia.com/terms/s/systematicinvestmen...