This is the market revolutionary change happened, achieved fame and many of us heard of it without knowing much about it.
Unfortunately, many new investors seem to be under a misconception that it is a type of mutual fund. A Systematic Investment Plan is not a type of mutual fund; it is a method of investing in a mutual fund.
Here's to coming to terms associated with mutual funds. There are two ways in which we can invest in a mutual fund.
A one-time outright payment:
If we invest directly in the fund, we just hand over the cheque and we get our fund units depending on the value of the units on that particular day.
Periodic investments or SIP (Our present area of concentration):
This is referred to as a SIP. That means that, every month, we commit to investing, say, Rs. 1,000 in our fund. At the end of a year, we would have invested Rs. 12,000 in our fund.