SIP or Systematic Investment Plan is a plan through which a person can invest a small amount in a mutual fund at regular intervals (monthly/quarterly).
SIP averages your investment cost over the investment duration and gives the flexibility of choosing your own amount and frequency, making it an ideal investment option for any investor.
Every month/quarter a specific amount (decided by the investor at the start of SIP) is deducted from the investor’s bank account and invested in the chosen mutual fund scheme.
Every time the amount is invested, units of the scheme (as per NAV) are allotted to the investor.
Since your investment amount gets broken down in equal installments, your investments average out the market ups and downs resulting in averaging your cost.
The Investor can redeem (withdraw) units or switch to another scheme, anytime he/she wishes to do so (Please check the scheme related documents as some mutual funds would have a specified lock-in period).