How do ?500 SIP Mutual Funds Work?

SIP allows investors to invest a fixed amount in mutual funds at regular intervals (weekly, monthly, or quarterly). Even with ?500, investors can participate in equity, debt, or hybrid mutual funds, depending on their risk appetite. These investments are automatically deducted from a linked bank account, ensuring consistency and eliminating the need for market timing.

Through rupee cost averaging, SIPs help mitigate market volatility by purchasing more units when prices are low and fewer units when prices are high. Over time, this reduces the overall investment cost and enhances returns.