SIP vs Mutual Fund

Mutual Fund

Money is collected from several investors, combined and invested.  MFs are handled by a fund manager, who is a financial markets and investments expert who does research before investing.

MF Investments

The investments can be made in various assets like equity, bonds, and money market instruments to earn returns while achieving a common objective among investors.


SIP or systematic investment plan is a method of investing and not a product itself.  You can contribute small but regular amounts to invest in an MF and build a corpus over a period of time.

Lump-Sum Investment 

With a lump sum investment, you invest all your money in one shot.

SIP Benefits: Regularity

With a SIP, you make regular payments to purchase units of mutual funds.  This inculcates the habit of investing regularly.

SIP Benefits:   Compounding

Investment happens in a disciplined way at regular intervals and wealth accumulates over a period of time.  It is a better path to achieve your investment goals.

SIP Benefits: Flexibility

SIP investments give you higher flexibility, where you can invest small amounts on a regular basis either weekly, fortnightly or monthly as per your convenience.

SIP Benefits: Lower Cost

SIPs give you the benefit of cost averaging.  You can lower the overall cost of purchase by buying more units when the market is down and fewer units when the market is up.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.