SIP stands for Systematic Investment Plan. It is a method of investing a fixed amount regularly in mutual fund schemes to build long-term wealth.

What is the difference between SIP, SWP and STP?

SIP is used for investing regularly, SWP is used for withdrawing money regularly, and STP is used for transferring funds systematically between mutual fund schemes.

What is SIP (Systematic Investment Plan)?

A disciplined and systematic approach to long-term wealth creation through mutual funds.

A Systematic Investment Plan (SIP) is a mutual fund investment method where investors invest a fixed amount at regular intervals such as monthly, weekly, or quarterly. SIP is widely used for long-term investment goals because it removes the need to time the market.

SIP investing benefits from rupee cost averaging, which means buying more units when markets are low and fewer units when markets are high. This helps reduce the impact of market volatility over time.

SIP also leverages the power of compounding, where returns generated on your investments start earning returns themselves. This makes SIP suitable for goals like retirement planning, children’s education, and wealth creation.

👉 Try the SIP Calculator to estimate your future investment value

SIP Formula (Future Value approximation):
FV = P × {[(1 + r)ⁿ − 1] / r} × (1 + r)
Where P = monthly investment, r = periodic return rate, n = number of investments

SIP investment growth through compounding and disciplined investing

Benefits of SIP

✅ Rupee Cost Averaging reduces market volatility impact.

✅ Power of Compounding accelerates long-term growth.

✅ Disciplined Investing builds consistent saving habits.

✅ Convenient auto-debit investments.

✅ Start Small with investments as low as ₹500.

✅ Flexible and easy to modify or stop.

Other Systematic Investment Options

Apart from SIP, mutual funds also offer systematic withdrawal and transfer options to manage income and reduce investment risk.

What is SWP (Systematic Withdrawal Plan)?

SWP allows investors to withdraw a fixed amount periodically from mutual fund investments. It is commonly used for retirement income or regular cash flow.

👉 Explore goal-based planning using the Goal SIP Calculator

What is STP (Systematic Transfer Plan)?

STP allows systematic transfer of money from one mutual fund scheme to another, usually from debt to equity, to reduce market timing risk.

👉 Compare scenarios using the Lumpsum Calculator

SIP vs SWP vs STP

Feature	SIP	SWP	STP
Purpose	Wealth creation	Regular income	Gradual investment
Money Flow	Investor → Fund	Fund → Investor	Fund → Fund
Best For	Long-term goals	Retirement	Lump sum deployment

Still have questions? Visit our SIP FAQs for quick answers.