What is SIP?

An SIP is a facility offered by all mutual funds for investing in equity funds. It requires you to invest a fixed sum of money periodically,say monthly,or quarterly,in an equity fund of your choice.The amount can be low as Rs 500 or Rs 1000. Your SIP should last for a minimum of six months.So even if you do not have a lumpsom to commit at the start, you can make a small beginning using an SIP,and then continue to invest periodically.The approach here is similar to investing regularly,every month,in recurring deposits of banks and post offices.However, a SIP gives you the long-term benefit of equity investing.