Enable investment of a fixed sum at periodical intervals for a fixed term in a chosen scheme. This can be automated by either giving post dated cheques to the mutual fund house or standing instructions to your bank.

Using SIP, investment can be made over a period of time to build a corpus...

Further you are able to lower the average purchase price over time.

An illustration to explain the concept of Rupee-Cost Averaging

Date Amount invested (`) NAV (Rs) Units purchased
1-Jan-09 5,000.00 13.2816 374.461
1-Feb-09 5,000.00 14.1634 353.023
1-Mar-09 5,000.00 12.5871 397.232
1-Apr-09 5,000.00 11.9253 419.227
1-May-09 5,000.00 13.9844 357.541
Total 25,000.00   1,903.533
Average purchase price Rs. 13.1335

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