In SIPs, a fixed amount of money is debited by the investors in bank accounts at times and invested in a specified mutual fund. The investor is allocated a number of units according to the current net asset value Every time a sum is invested, more items are added to the investors account. Strategy claims to free the investors from risking in volatile markets by dollar cost averaging. As the investor is getting more items when the rate is low and less units when the rate is high, in the long run, the average cost per unit is supposed to be lower.
SIP claims to boost controlled investment. SIPs are flexible; the investors may stop investing a plan anytime or may choose to increase or decrease the investment amount. SIP is usually suggested to retail investors who do not have the resources to pursue the active investment.